The ultimate vindication of Republican supply-side economics

[itfitzme]

Investment in stock isn't made based on the tax, it's made based on the expected ROI.


Interesting. So the tax doesn't change the expected ROI?

Yeah, I can tell you carefully crafted that question based on your MBA, economics education, and years of investment experience.

You are as dumb as a nut.

You made a stupid comment, I pointed out your stupidity.

Maybe you should create a chart with more bad numbers?

By god, you sure did. Your knowledge is just over whelming.

 

[Toddsterpatriot]

Yeah, I can tell you carefully crafted that question based on your MBA, economics education, and years of investment experience.

You are as dumb as a nut.

You made a stupid comment, I pointed out your stupidity.

Maybe you should create a chart with more bad numbers?

By god, you sure did. Your knowledge is just over whelming.

I sure have an easy time pointing out your confusion.

 

[stans]

"Could" is ALWAYS meaningless economically because you prove or disprove nothing if you use it in an argument. You have no understanding of the meaning of cause and effect in economics. To prove something you have to either isolate it, which economically is next to impossible, or show that it works on the average more often than not. "Could" is an excuse to cloudy the waters. For example: Say that the last ten times that capital gains taxes were lowered by more than, say, 5% that GDP increased annually by 10% for the next 3 years. Say that on the 11th time CG taxes were reduced by more than 5% GDP decreased annually by 10% for the next three years. Are you going to say that was because investors decided not to invest? Why did they decide not to invest? Something else economically more powerful than decreasing CG taxes occured. And you haven't the faintest idea. You just state your unfounded opinions and have absolutely no understanding of economics.

Who said this? "Most especially when they think my opinions are too complicated to analyze." No statement of cause and effect, just meaningless opinions.

Okay. You obviously think your arguments are brilliant, because you cut and paste lots of numbers that you haven't supported with anything, and my arguments are ignorant and without substance or foundation because you can't a) understand them or b) dispute them or c) don't want to believe them. And that's okay. I'll concentrate on folks bright enough to follow my argument.

But the reason they could decide not to invest despite a CG reduction could include any or all of the following plus hundreds of other variables:

1) Government mandates (wages, materials used, mandatory union wages, etc. etc. etc.) enacted or threatened.
2) Unacceptable or unprofitable government regulation. (Oppressive environmental requirements for one.)
3) Obamacare that is a huge mandate/tax increase hanging over their heads.
4) Cap & Trade that will be put into effect as soon as the administration can stack Congress with enough people to pass it. (Another huge mandate/regulatory nightmare/tax increase hanging over their heads.)
5) Three years is nowhere near long enough for many high end projects. Ten years provides more incentive (which is why the Bush tax policy was so well received) and fifteen or twenty or implied permanent is far better.
6) Enacted or threatened other taxes or fees that affect the bottom line.
6) Other factors include but are not limited to availability of raw materials, unrest or disruption of markets, cost of transportation, availability of qualified labor, etc.

Specifically, what numbers did I cut and paste?

More importantly, you have presented no arguments. You're expressing your opinions which are not economic arguments. You gave me a list of over 6 different possible reasons why investors COULD decide not to invest. Economics attempts to identify which of the items, if any, that you delineated is the reason. "Could" may be the beginning of an argument, by listing the possibilities as you've done. Opinions are outside of economics. Economics, attempts to find numerical cause and effect by examining series of similar past occurences and deducing equations which given a cause will allow an economist to predict an effect numerically. It's not opinions. "Could" does the opposite of what economics is attempting; It expands the number of possibilities that may cause effect rather than contract them as economics trys to do. Go look up the definition of economics.

 

[Foxfyre]

"Could" is ALWAYS meaningless economically because you prove or disprove nothing if you use it in an argument. You have no understanding of the meaning of cause and effect in economics. To prove something you have to either isolate it, which economically is next to impossible, or show that it works on the average more often than not. "Could" is an excuse to cloudy the waters. For example: Say that the last ten times that capital gains taxes were lowered by more than, say, 5% that GDP increased annually by 10% for the next 3 years. Say that on the 11th time CG taxes were reduced by more than 5% GDP decreased annually by 10% for the next three years. Are you going to say that was because investors decided not to invest? Why did they decide not to invest? Something else economically more powerful than decreasing CG taxes occured. And you haven't the faintest idea. You just state your unfounded opinions and have absolutely no understanding of economics.

Who said this? "Most especially when they think my opinions are too complicated to analyze." No statement of cause and effect, just meaningless opinions.

Okay. You obviously think your arguments are brilliant, because you cut and paste lots of numbers that you haven't supported with anything, and my arguments are ignorant and without substance or foundation because you can't a) understand them or b) dispute them or c) don't want to believe them. And that's okay. I'll concentrate on folks bright enough to follow my argument.

But the reason they could decide not to invest despite a CG reduction could include any or all of the following plus hundreds of other variables:

1) Government mandates (wages, materials used, mandatory union wages, etc. etc. etc.) enacted or threatened.
2) Unacceptable or unprofitable government regulation. (Oppressive environmental requirements for one.)
3) Obamacare that is a huge mandate/tax increase hanging over their heads.
4) Cap & Trade that will be put into effect as soon as the administration can stack Congress with enough people to pass it. (Another huge mandate/regulatory nightmare/tax increase hanging over their heads.)
5) Three years is nowhere near long enough for many high end projects. Ten years provides more incentive (which is why the Bush tax policy was so well received) and fifteen or twenty or implied permanent is far better.
6) Enacted or threatened other taxes or fees that affect the bottom line.
6) Other factors include but are not limited to availability of raw materials, unrest or disruption of markets, cost of transportation, availability of qualified labor, etc.

Specifically, what numbers did I cut and paste?

More importantly, you have presented no arguments. You're expressing your opinions which are not economic arguments. You gave me a list of over 6 different possible reasons why investors COULD decide not to invest. Economics attempts to identify which of the items, if any, that you delineated is the reason. "Could" may be the beginning of an argument, by listing the possibilities as you've done. Opinions are outside of economics. Economics, attempts to find numerical cause and effect by examining series of similar past occurences and deducing equations which given a cause will allow an economist to predict an effect numerically. It's not opinions. "Could" does the opposite of what economics is attempting; It expands the number of possibilities that may cause effect rather than contract them as economics trys to do. Go look up the definition of economics.

And your comments here are not your opinion. . . . .how?

"Could" is the proper word to use in the context in which I used it as there are few absolutes and many, many variables in macro economics. I would really like to see your support for how 'cause and effect' as not a component of economics and really see your rationale for how economics 'tries to contract the number of possibilities that may cause effect". I think you might be the one who needs to look up the definition of economics.

But while you work on that, I will point out that the topic of the thread is supply-sided economics which can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending. It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again. My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

 

[itfitzme]

upply-sided economics .. can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending.

It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again.

My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

So it has been proven to have worked time and time again except all the times it was implemented it didn't because of some other confounding factor. So it never actually did anything.

It that what your saying?

 

[Foxfyre]

upply-sided economics .. can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending.

It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again.

My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

So it has been proven to have worked time and time again except all the times it was implemented it didn't because of some other confounding factor. So it never actually did anything.

It that what your saying?

No, I am saying that the theory has been shown to work numerous times. JFK believed in it as did Reagan and George W. Bush. And with Reagan and Bush, the right kind of tax reductions did not reduce treasury receipts but the treasury swelled with incoming revenues. So the theory does appear to be sound.

BUT. . . .it will work only if other economic factors are in place. For instance, if you have more houses and office/business space on the market than there are buyers for those houses etc., supply side isn't going to boost construction activity. If you have high unemployment already, Obamacare, Cap & Trade, excessive regulation, higher taxes on high end profits etc., either already in practice or threatening, all inhibit investment so that fewer jobs will be created. A public in fear of losing their jobs are less likely to spend for anything but absolutely necessary items. That is why Obama's temporary payroll tax reductions didn't have much overall effect on the general economy. And in that kind of economic environment, even a reduction in Capital Gains tax or corportate income tax might not get the economy moving again. Supply side isn't a stand alone economic principle but has to work within the whole. There must be a profit for those engaged in commerce or no tax policy of any kind will generate business activity. And there must be confidence in the economy, or consumer spending will be restrained.

If the Obama administration had provided some guarantees of a reasonable tax policy--something they refused to do. . . .

If the Obama admiinistration had worked to reduce unnecessary onerous regulation and removed many of the unnecessary mandates imposed on commerce and industry. . . .

If the Obama administration had reined in spending and brought the deficit under control instead of funneling so many hundreds of millions and billions into pipe dream theories, most of which are now failing. . . .

If the Obama administration had relaxed restrictions on energy production and allowed the free market to determine what direction we would go with that and/or provided incentive to do exploration and increase production, and . . . .

If the Obama administration had focused on repairing and fixing government imposed policy in Freddie, Fannie, and financial institutions. . . .

We could be well on our way out of the recession by now and might well be recovered and booming again.

But we'll never know will we.

 

[stans]

Okay. You obviously think your arguments are brilliant, because you cut and paste lots of numbers that you haven't supported with anything, and my arguments are ignorant and without substance or foundation because you can't a) understand them or b) dispute them or c) don't want to believe them. And that's okay. I'll concentrate on folks bright enough to follow my argument.

But the reason they could decide not to invest despite a CG reduction could include any or all of the following plus hundreds of other variables:

1) Government mandates (wages, materials used, mandatory union wages, etc. etc. etc.) enacted or threatened.
2) Unacceptable or unprofitable government regulation. (Oppressive environmental requirements for one.)
3) Obamacare that is a huge mandate/tax increase hanging over their heads.
4) Cap & Trade that will be put into effect as soon as the administration can stack Congress with enough people to pass it. (Another huge mandate/regulatory nightmare/tax increase hanging over their heads.)
5) Three years is nowhere near long enough for many high end projects. Ten years provides more incentive (which is why the Bush tax policy was so well received) and fifteen or twenty or implied permanent is far better.
6) Enacted or threatened other taxes or fees that affect the bottom line.
6) Other factors include but are not limited to availability of raw materials, unrest or disruption of markets, cost of transportation, availability of qualified labor, etc.

Specifically, what numbers did I cut and paste?

More importantly, you have presented no arguments. You're expressing your opinions which are not economic arguments. You gave me a list of over 6 different possible reasons why investors COULD decide not to invest. Economics attempts to identify which of the items, if any, that you delineated is the reason. "Could" may be the beginning of an argument, by listing the possibilities as you've done. Opinions are outside of economics. Economics, attempts to find numerical cause and effect by examining series of similar past occurences and deducing equations which given a cause will allow an economist to predict an effect numerically. It's not opinions. "Could" does the opposite of what economics is attempting; It expands the number of possibilities that may cause effect rather than contract them as economics trys to do. Go look up the definition of economics.

And your comments here are not your opinion. . . . .how?

"Could" is the proper word to use in the context in which I used it as there are few absolutes and many, many variables in macro economics. I would really like to see your support for how 'cause and effect' as not a component of economics and really see your rationale for how economics 'tries to contract the number of possibilities that may cause effect". I think you might be the one who needs to look up the definition of economics.

But while you work on that, I will point out that the topic of the thread is supply-sided economics which can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending. It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again. My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

References please. If you quote a book, please supply the page numbers as is commonly accepted so that watever your quoting can be found easily.

 

[Foxfyre]

Specifically, what numbers did I cut and paste?

More importantly, you have presented no arguments. You're expressing your opinions which are not economic arguments. You gave me a list of over 6 different possible reasons why investors COULD decide not to invest. Economics attempts to identify which of the items, if any, that you delineated is the reason. "Could" may be the beginning of an argument, by listing the possibilities as you've done. Opinions are outside of economics. Economics, attempts to find numerical cause and effect by examining series of similar past occurences and deducing equations which given a cause will allow an economist to predict an effect numerically. It's not opinions. "Could" does the opposite of what economics is attempting; It expands the number of possibilities that may cause effect rather than contract them as economics trys to do. Go look up the definition of economics.

And your comments here are not your opinion. . . . .how?

"Could" is the proper word to use in the context in which I used it as there are few absolutes and many, many variables in macro economics. I would really like to see your support for how 'cause and effect' as not a component of economics and really see your rationale for how economics 'tries to contract the number of possibilities that may cause effect". I think you might be the one who needs to look up the definition of economics.

But while you work on that, I will point out that the topic of the thread is supply-sided economics which can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending. It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again. My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

References please. If you quote a book, please supply the page numbers as is commonly accepted so that watever your quoting can be found easily.

I'll provide references when you provide references for your understanding of economic principles. Fair? Until then I base my perceptions and opinions on what I learned in college and in subsequent independent study, on what I read of numerous economic experts, talking with business people across our state, and studying their P & Ls which I did for many years operating my own business.

Meanwhile, here is an excellent summary essay discussing the effects of supply side during the Reagan adminsitration:
Supply-Side Tax Cuts and the Truth about the Reagan Economic Record | William A. Niskanen and Stephen Moore | Cato Institute: Policy Analysis

 

[stans]

And your comments here are not your opinion. . . . .how?

"Could" is the proper word to use in the context in which I used it as there are few absolutes and many, many variables in macro economics. I would really like to see your support for how 'cause and effect' as not a component of economics and really see your rationale for how economics 'tries to contract the number of possibilities that may cause effect". I think you might be the one who needs to look up the definition of economics.

But while you work on that, I will point out that the topic of the thread is supply-sided economics which can be boiled down to a theory that reducing rtaxes will stimulate the economy by increasing consumer spending. It is theorized that over time, the boost will generate a larger tax base that will make up any loss of Treasury revenues initially created by the tax cut and that results in benefit to all.

The theory has generally been shown to have merit time and again. My argument is that the theory is sound but only within the larger picture of the other components that I listed. Again, for instance, you can drop the Capital Gains tax to zero, but if other economic factors are against risking investment capital, the investor is not going to invest. Also, all tax reductions are not equal within the supply side model.

References please. If you quote a book, please supply the page numbers as is commonly accepted so that watever your quoting can be found easily.

I'll provide references when you provide references for your understanding of economic principles. Fair? Until then I base my perceptions and opinions on what I learned in college and in subsequent independent study, on what I read of numerous economic experts, talking with business people across our state, and studying their P & Ls which I did for many years operating my own business.

Meanwhile, here is an excellent summary essay discussing the effects of supply side during the Reagan adminsitration:
Supply-Side Tax Cuts and the Truth about the Reagan Economic Record | William A. Niskanen and Stephen Moore | Cato Institute: Policy Analysis

That's a good way to wriggle out of it. Completely non-descript. I won't respond to your posts anymore since they're all non-economic and I have no interest in convincing you of anything since you already know everything.

 

[Foxfyre]

References please. If you quote a book, please supply the page numbers as is commonly accepted so that watever your quoting can be found easily.

I'll provide references when you provide references for your understanding of economic principles. Fair? Until then I base my perceptions and opinions on what I learned in college and in subsequent independent study, on what I read of numerous economic experts, talking with business people across our state, and studying their P & Ls which I did for many years operating my own business.

Meanwhile, here is an excellent summary essay discussing the effects of supply side during the Reagan adminsitration:
Supply-Side Tax Cuts and the Truth about the Reagan Economic Record | William A. Niskanen and Stephen Moore | Cato Institute: Policy Analysis

That's a good way to wriggle out of it. Completely non-descript. I won't respond to your posts anymore since they're all non-economic and I have no interest in convincing you of anything since you already know everything.

Promise. (And thanks for the vote of confidence. I don't know everything but I do know something about economics. And I guess posting the requested reference is not pertinent? Oh well. . . .)

 

[itfitzme]

with Reagan and Bush, the right kind of tax reductions did not reduce treasury receipts but the treasury swelled with incoming revenues.

You realize, of course, the population and workforce continues to grow so absolute values are meaningless, they go up just because of population growth.

The only way to look at it is receipts per working person and outlays per capita. It's the only way to deal with the changing employment to population ratio and just changing population. And, of course, in real dollars.

Bush II spent more money, per capita and per working person, then any other president. (In all fairness, we can't include the bank bailout year). Bush II and Clinton did increase receipts per worker and per capita, and far greater then anything that Reagan did.

Reagan's was better then previous admins but his outlays per capita were also higher. If we can say anything simply about it, it is that he spent a crap load per person compared to any admin except Bush II.

That's the real pisser, there is outlays on the flip side of receipts. It's foolish to ignore the outlays.

Really, it seems that Clinton's receipts were very much a result of the dot com bubble. Congress had laid the ground work for before he took office so the tech boom had as much to do with the receipts as anything. He was the only one that lowered spending.

hmm....

 

[EdwardBaiamonte]

He[Clinton] was the only one that lowered spending.

hmm....

Sorry but you mean Newt was the only one who lowered spending. He took over the House for Republicans for the first time in 40 years. Newt made him lie and say, " the era of big government is over." He obviously didn't believe that. If he did he'd be a Republican. Why not read his latest book in which he rails against those who are for limited government for 300 pages.

 

[itfitzme]

He[Clinton] was the only one that lowered spending.

hmm....

Sorry but you mean Newt was the only one who lowered spending. He took over the House for Republicans for the first time in 40 years. Newt made him lie and say, " the era of big government is over." He obviously didn't believe that. If he did he'd be a Republican. Why not read his latest book in which he rails against those who are for limited government for 300 pages.

Yeah, and Bernanke and Friedman said the gold standard caused the Great Depression.

If you say it, it's obviously wrong.

 

[EdwardBaiamonte]

He[Clinton] was the only one that lowered spending.

hmm....

Sorry but you mean Newt was the only one who lowered spending. He took over the House for Republicans for the first time in 40 years. Newt made him lie and say, " the era of big government is over." He obviously didn't believe that. If he did he'd be a Republican. Why not read his latest book in which he rails against those who are for limited government for 300 pages.

Yeah, and Bernanke and Friedman said the gold standard caused the Great Depression.

If you say it, it's obviously wrong.

1) I notice you are afraid to confute any of the specifics above about Newt, not Clinton, being responsible for spending decreases. What does your fear tell you?

2) Would you like to bet $10,000 about Friedman. He said a failure to adhere to the rules of the Gold Standard caused the Depression. Bet or run away again with your liberal tail between your legs.

 

[alan1]

Perhaps you forgot that expanding businesses causes economic expansion. Since business will be expanding using their own money rather than government supplied Keynesian money the National Debt (ND) should nominally remain the same. So in addition to reducing unemployment this activity will increase GDP, lower ND to GDP ratio, and stabilize prices over the long run since business expansion will increase future supply to meet future expanded demand. More detail of the mechanics and benefits are delineated in my article. Try reading the last section to evaluate it fully. Reduce Unemployment with Little Price Increase

I hope that you will take the time to read more than the first sentence of my posting this time.

Interestingly enough, you admit that raising taxes on them is a loss to them. You even indicated that taxing them might induce them to expand (really?). then you say to give them their own money back. Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs? I fail to see how taking it from them in the first place, only to give it back to them, does anybody any good. the initial taking of the tax money means that money isn't in the business owners hands to use. That's like telling me you are going to take my vacuum cleaner from me, but right after I vacuum my house, you'll give it back to me.

"We could if we induced businesses to expand by raising their taxes and simultaneously making them eligable for tax credits for expansion so they could get their tax losses back".

Did you happen to read the word SIMULTANEOUSLY in the sentence that you quoted? Your argument could be construed as correct without it, although the plan's intent without the word "simultaneously" expressly included should be understood by someone who stops and thinks about the plan instead of blindly trying to invalidate it.


And businesses, especially public one's, will expand when their competition pays less taxes due to tax credits and SIMULTANEOULY begin to expand. Don't expand, pay more taxes , and then explain the losses to your stockholders as your stock price plummets because of lower income.

Read the last section of the referenced article to get the full picture and your comments will be appreciated.

"Why not just let them keep the money to begin with so that they can use it as capitol for whatever their business needs?"

Because they're pulling back in hard economic times doing nothing with their money. The plan induces them to expand which should be beneficial to them and everyone else. FYI, Andrew Carnegie, once the world's richest man and owner, creater, and builder of US Steel
in the last half of the 19th century, would only expand during economic downturns when no one else did, as now. His business was private so that expansion in downturns was his determination which he was extremely successful at.

Silly me to not agree that "simultaneously" should be the the word used to decide who gets taxed more heavily than the other person (business0), based upon some arbitrary opinion of yours that determines how investment income or profit should be spent.
It seriously sounds like you advocate imposing a higher tax upon a business that doesn't want to try and take over the market. I guess Walmart should be taxed less than any other corporation according to your logic. Good luck selling that proposal to your fellow liberals.

I'm pretty sure that government decisions about how to tax shouldn't be forced upon a business just because Mr Carnegie did something in the 19th century (hint, we are in the 21st century), but feel free to live in the past. Good thing Bill Gates and Steve Jobs don't follow your philosophy.

 

[Foxfyre]

with Reagan and Bush, the right kind of tax reductions did not reduce treasury receipts but the treasury swelled with incoming revenues.

You realize, of course, the population and workforce continues to grow so absolute values are meaningless, they go up just because of population growth.

The only way to look at it is receipts per working person and outlays per capita. It's the only way to deal with the changing employment to population ratio and just changing population. And, of course, in real dollars.

Bush II spent more money, per capita and per working person, then any other president. (In all fairness, we can't include the bank bailout year). Bush II and Clinton did increase receipts per worker and per capita, and far greater then anything that Reagan did.

Reagan's was better then previous admins but his outlays per capita were also higher. If we can say anything simply about it, it is that he spent a crap load per person compared to any admin except Bush II.

That's the real pisser, there is outlays on the flip side of receipts. It's foolish to ignore the outlays.

Really, it seems that Clinton's receipts were very much a result of the dot com bubble. Congress had laid the ground work for before he took office so the tech boom had as much to do with the receipts as anything. He was the only one that lowered spending.

hmm....

Clinton lowered spending because he had a reform minded Republican Congress for six of his eight years. To his credit, he was sometimes dragged into that kicking and screaming, but he finally signed the bills to accomplish it. (He vetoed welfare reform three times? before he finally signed it.)

It isn't really fair to compare Bush 43 GDP performance with Reagan, Bush 41, or Clinton as Reagan, Bush 41, and Clinton had nothing to contend with to compare with a 9/11, a Katrina, or the housing bubble burst. The Dot.com bubble burst was an economic calamity, but small scale compared to the three main events of the Bush 43 administration.

But if you look at Reagan, Bush 41, and Clinton, Reagan comes out looking the best hands down.

A good discussion and comparison here:
Bush-Clinton: What Went Wrong? | Stephen Moore | Cato Institute: Daily Commentary

 

[itfitzme]

with Reagan and Bush, the right kind of tax reductions did not reduce treasury receipts but the treasury swelled with incoming revenues.

You realize, of course, the population and workforce continues to grow so absolute values are meaningless, they go up just because of population growth.

The only way to look at it is receipts per working person and outlays per capita. It's the only way to deal with the changing employment to population ratio and just changing population. And, of course, in real dollars.

Bush II spent more money, per capita and per working person, then any other president. (In all fairness, we can't include the bank bailout year). Bush II and Clinton did increase receipts per worker and per capita, and far greater then anything that Reagan did.

Reagan's was better then previous admins but his outlays per capita were also higher. If we can say anything simply about it, it is that he spent a crap load per person compared to any admin except Bush II.

That's the real pisser, there is outlays on the flip side of receipts. It's foolish to ignore the outlays.

Really, it seems that Clinton's receipts were very much a result of the dot com bubble. Congress had laid the ground work for before he took office so the tech boom had as much to do with the receipts as anything. He was the only one that lowered spending.

hmm....

Clinton lowered spending because he had a reform minded Republican Congress for six of his eight years. To his credit, he was sometimes dragged into that kicking and screaming, but he finally signed the bills to accomplish it. (He vetoed welfare reform three times? before he finally signed it.)

It isn't really fair to compare Bush 43 GDP performance with Reagan, Bush 41, or Clinton as Reagan, Bush 41, and Clinton had nothing to contend with to compare with a 9/11, a Katrina, or the housing bubble burst. The Dot.com bubble burst was an economic calamity, but small scale compared to the three main events of the Bush 43 administration.

But if you look at Reagan, Bush 41, and Clinton, Reagan comes out looking the best hands down.

A good discussion and comparison here:
Bush-Clinton: What Went Wrong? | Stephen Moore | Cato Institute: Daily Commentary

Here is the receipts and outlays, per capita and worker, over time.

In current dollars goes up exponentially. The real dollars looks about the same, per capita and per worker just makes it a bit flatter.

How we get to Reagan was somehow the best hands down I cannot imagine. Even if we look at % chg, it's pretty much just average.

Really, the dot com burst and the recession of '07 aren't anything but Katrina, 9/11 and the wars are for Bush.

So we are ignoring the effects of technology bubble booms and busts, which is the underlying problem that has plagued the economy since before the Great Depression. Perhaps the housing bubble was small scale compared to Katrina as well.

Why Clinton decreased spending is meaningless. It happened or it didn't. The point of the thread is "vindication of supply side economics". And supply side economics doesn't care why it happened, just that it did.

This isn't the "Who was a better president" thread. Putting in terms of the presidency is convenient because we organize things that way. And we name tax changes after the presidential term. Regardless of the president, they either had an effect or they didn't.

Katrina, 9/11 and the wars were a tremendous burden to Bush's presidency but Obama inheriting a massive recession doesn't go towards his credit. If were going to make excuses, then it's a sword that cuts both ways. We either credit each with the crap or we hold each responsible for what they have to deal with. Each event gets measured in terms of it's impact, in dollars and lives, and is either factored in or is not. Frankly, I'd factor them in.

As far as I'm concerned, Bush and the Fed did a great job keeping the economy just smoothly rising upward in spite of an economy that was ready to collapse as early as the '05-'06 time frame. That was when the first indications of people dropping of their keys and declaring bankruptcy on medical bills first appeared. That is when there were the first indications of the business credit market tightening up. And Bush also drove the outlays per capita higher then any previous presidency. In-spite of things, he implemented attempts as demand side stimulus and the massive bank bailout. And it doesn't matter if he did it because he liked or inspite of hating it. He did.

The problem that we have, the underlying cause of the repeated recessions, is far more fundamental then just tax cuts or increases. Changes in interest rates, tax rates, deficit spending all keep bandaging some underlying imbalance. And it seems perfectly reasonable that the right tax cut, during periods of less than full output, may help medium and small businesses accumulate enough capital to invest in materials and capital equipment. Hopefully, out of 7 million businesses, enough of them will tap demand. It really ought to be there, at the very least in terms of a short burst before the economy balances out again. But in the final analysis, it's either measurable or it's not. And if it's not, it doesn't exist.

What is really intersting, if you follow that tragectory of gov't outlays, inspite of the reduction through the Clinton admin, it's right back to where the tragectory would have it. It just smells like there is something underlying that requires it go the way it's going. When it comes down to it, buyers, sellers, Congress and presidents end up doing what they have to do, not what they say they want to do. It's supply and demand.

9/11 was meaningless, American's don't roll over and die because of an attack on a couple of skyscrapers. If anything, they buckle down and work harder. I'd sure like to see some data to suggest it had an effect. As far as I can tell, American's aren't a bunch of pussies. Whatever networks got broken because of it were bypassed and repaired by the end of the week. We wouldn't expect any less.

Katrina, without some evidence one way or another, is meaningless. A disaster can just as well increase GDP. Refer to the broken window fallacy. GDP and unemployment didn't even blip on it.

And increasing military and military spending is about as Keynesian as we can get. The military is the biggest public works program ever devised by man. It has been that way since the beginning of history, when the economy goes to shit, countries went to war. Everyone is pretty much in agreement that WWII was one of the major factors that ended the Great Depression. War doesn't cause GDP to decline though it may increase it, I highly doubt that the two police actions were significant. It may reduce unemployment as it reduces the workforce. And there is an interesting change to the rate of change of unemployment shortly after Afganistan began.

But without some measure to put them into context of scale, there all just stories.

 

[editec]

Sure supply side economic policies were effective.

The rich are richer than ever and the nation ande the working classes are going bankrupt.

That was the plan all along and it's working beautifully.

 

[Brutus]

Sure supply side economic policies were effective.

The rich are richer than ever and the nation ande the working classes are going bankrupt.

That was the plan all along and it's working beautifully.

Of course there was no real supply side capitalism given government tax/ print and spend has always been growing. Only a liberal would not know that.

 

[Foxfyre]

You realize, of course, the population and workforce continues to grow so absolute values are meaningless, they go up just because of population growth.

The only way to look at it is receipts per working person and outlays per capita. It's the only way to deal with the changing employment to population ratio and just changing population. And, of course, in real dollars.

Bush II spent more money, per capita and per working person, then any other president. (In all fairness, we can't include the bank bailout year). Bush II and Clinton did increase receipts per worker and per capita, and far greater then anything that Reagan did.

Reagan's was better then previous admins but his outlays per capita were also higher. If we can say anything simply about it, it is that he spent a crap load per person compared to any admin except Bush II.

That's the real pisser, there is outlays on the flip side of receipts. It's foolish to ignore the outlays.

Really, it seems that Clinton's receipts were very much a result of the dot com bubble. Congress had laid the ground work for before he took office so the tech boom had as much to do with the receipts as anything. He was the only one that lowered spending.

hmm....

Clinton lowered spending because he had a reform minded Republican Congress for six of his eight years. To his credit, he was sometimes dragged into that kicking and screaming, but he finally signed the bills to accomplish it. (He vetoed welfare reform three times? before he finally signed it.)

It isn't really fair to compare Bush 43 GDP performance with Reagan, Bush 41, or Clinton as Reagan, Bush 41, and Clinton had nothing to contend with to compare with a 9/11, a Katrina, or the housing bubble burst. The Dot.com bubble burst was an economic calamity, but small scale compared to the three main events of the Bush 43 administration.

But if you look at Reagan, Bush 41, and Clinton, Reagan comes out looking the best hands down.

A good discussion and comparison here:
Bush-Clinton: What Went Wrong? | Stephen Moore | Cato Institute: Daily Commentary

Here is the receipts and outlays, per capita and worker, over time.

In current dollars goes up exponentially. The real dollars looks about the same, per capita and per worker just makes it a bit flatter.

How we get to Reagan was somehow the best hands down I cannot imagine. Even if we look at % chg, it's pretty much just average.

Really, the dot com burst and the recession of '07 aren't anything but Katrina, 9/11 and the wars are for Bush.

So we are ignoring the effects of technology bubble booms and busts, which is the underlying problem that has plagued the economy since before the Great Depression. Perhaps the housing bubble was small scale compared to Katrina as well.

Why Clinton decreased spending is meaningless. It happened or it didn't. The point of the thread is "vindication of supply side economics". And supply side economics doesn't care why it happened, just that it did.

This isn't the "Who was a better president" thread. Putting in terms of the presidency is convenient because we organize things that way. And we name tax changes after the presidential term. Regardless of the president, they either had an effect or they didn't.

Katrina, 9/11 and the wars were a tremendous burden to Bush's presidency but Obama inheriting a massive recession doesn't go towards his credit. If were going to make excuses, then it's a sword that cuts both ways. We either credit each with the crap or we hold each responsible for what they have to deal with. Each event gets measured in terms of it's impact, in dollars and lives, and is either factored in or is not. Frankly, I'd factor them in.

As far as I'm concerned, Bush and the Fed did a great job keeping the economy just smoothly rising upward in spite of an economy that was ready to collapse as early as the '05-'06 time frame. That was when the first indications of people dropping of their keys and declaring bankruptcy on medical bills first appeared. That is when there were the first indications of the business credit market tightening up. And Bush also drove the outlays per capita higher then any previous presidency. In-spite of things, he implemented attempts as demand side stimulus and the massive bank bailout. And it doesn't matter if he did it because he liked or inspite of hating it. He did.

The problem that we have, the underlying cause of the repeated recessions, is far more fundamental then just tax cuts or increases. Changes in interest rates, tax rates, deficit spending all keep bandaging some underlying imbalance. And it seems perfectly reasonable that the right tax cut, during periods of less than full output, may help medium and small businesses accumulate enough capital to invest in materials and capital equipment. Hopefully, out of 7 million businesses, enough of them will tap demand. It really ought to be there, at the very least in terms of a short burst before the economy balances out again. But in the final analysis, it's either measurable or it's not. And if it's not, it doesn't exist.

What is really intersting, if you follow that tragectory of gov't outlays, inspite of the reduction through the Clinton admin, it's right back to where the tragectory would have it. It just smells like there is something underlying that requires it go the way it's going. When it comes down to it, buyers, sellers, Congress and presidents end up doing what they have to do, not what they say they want to do. It's supply and demand.

9/11 was meaningless, American's don't roll over and die because of an attack on a couple of skyscrapers. If anything, they buckle down and work harder. I'd sure like to see some data to suggest it had an effect. As far as I can tell, American's aren't a bunch of pussies. Whatever networks got broken because of it were bypassed and repaired by the end of the week. We wouldn't expect any less.

Katrina, without some evidence one way or another, is meaningless. A disaster can just as well increase GDP. Refer to the broken window fallacy. GDP and unemployment didn't even blip on it.

And increasing military and military spending is about as Keynesian as we can get. The military is the biggest public works program ever devised by man. It has been that way since the beginning of history, when the economy goes to shit, countries went to war. Everyone is pretty much in agreement that WWII was one of the major factors that ended the Great Depression. War doesn't cause GDP to decline though it may increase it, I highly doubt that the two police actions were significant. It may reduce unemployment as it reduces the workforce. And there is an interesting change to the rate of change of unemployment shortly after Afganistan began.

But without some measure to put them into context of scale, there all just stories.

No, they aren't 'just stories'. You don't provide a source or a context for your graph, and without including all economic factors that come into play, your graph may or may or may not show the story as you interpret it. War invariably increases the GDP and economic uncertainty invariably decreases it. Both situations were present in the Bush 43 administration and of course 9/11, Katrina, and the housing crisis were all factors in that.

When I say that Clinton 'lowered spending', he in no way actually spent less. The reforms implemented in his term of office only slowed down the rate of spending so that the rate of growth could begin catching up with it. Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.

The graphs shown in my link is given context that people--most especially the middle class--were prospering under the Reagan supply side economy, but the argument against 'supply side' now is that raising taxes puts money in the treasury and lowers the deficit while the "Bush tax cuts" created the deficits. An honest analysis shows that simply was not the case. The money was rolling into the treasury after the tax restructure--it always takes six months to a year for such policy to actually show up in the economy--but unfortunately, Congress was spending more than was coming in, the huge lion's share of that on the war effort.

Would there have been as vigorous growth without the wars and the bonanza that provides to the defense industry? That is yet another factor to include in the mix.

Taxes, high or low, do not create deficits. Spending more than the treasury takes in creates deficit all of which accumulate to make up the National Debt currently more than 15 trillion and growing at 3 billion dollars per day. And if anybody thinks that is not a drag on the economy, that person understands economics not at all.

Taxes however, are the primary source of revenue for the federal government. What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth. Leave that out of the equation and you really are spinning your wheels within the context of supply sided economics. As is trying to break it down into per capita GDP without considering ratios of children too young to work and retirees no longer in the workforce within population growth.