The ultimate vindication of Republican supply-side economics

[Widdekind]

GDP = C+I+G + NX
[GDP/#] ~= [G/#]
GDP ~= G​

prima facie, GDP growth was driven by Government expenditures, with little change in Consumption

GDP = C + S + T​

after 2003, Taxes tracked GDP growth; from 2001-2003, Taxes did not track GDP; if Consumption was (quasi-)constant, then Savings "soaked up" GDP growth from 2001-2003 ("money saved on Tax-cuts invested in stocks"); after 2003, Taxes "soaked up" GDP growth

 

[Widdekind]

$300 B/year isn't an increase. It is a static amount. For it to be an increase, it has to uh.....oh what......I know, INCREASE.

if businesses willingly spend $300B/yr. on advertising; then (naively) they must perceive that they gain >$300B/yr.

if MV = PQ, then aggressive advertising may "extract" de-circulated "savings", or otherwise "accelerate" money, increasing V; increasing MV; increasing PQ = GDP ("people see the bill-board, they spend instead of save"):

without the advertising, people would buy the other guys product instead of theirs or save the money.

does not aggressive advertising plausibly make more Money move, more quickly ? for further example, current "Consumerist America" spends on Credit, which Credit they demand, to fulfill their desires "for all the latest fads"; demand for Credit tends to increase interest-rates, and "extract" "idle" Money, back into circulation ("stream of spending")

Advertising plausibly increases both M,V, increasing nominal spending = GDP

The OP is about corporate taxes, not individual income taxes.

according to Wikipedia, "supply-side" economics apologizes, for reduced taxes, for both "wealthy" individuals (potential private investors), and for businesses

The OP is about corporate taxes, followed by an example of exactly what he meant, Ireland corporate tax rates.

i thought that was a specific example, opening up debate to a more general discussion, of "supply-side" economics; no?

 

[itfitzme]

GDP = C+I+G + NX
[GDP/#] ~= [G/#]
GDP ~= G​

prima facie, GDP growth was driven by Government expenditures, with little change in Consumption

GDP = C + S + T​

after 2003, Taxes tracked GDP growth; from 2001-2003, Taxes did not track GDP; if Consumption was (quasi-)constant, then Savings "soaked up" GDP growth from 2001-2003 ("money saved on Tax-cuts invested in stocks"); after 2003, Taxes "soaked up" GDP growth

------

Proven wrong, you continue to come up with more bullshit. Instead of correcting your errors in the face of reality. You simply scamper off to some new error.

You stated that '"if "increased outlays stimulated GDP", then GDP would have been stimulated from 2001 AD ("at the same time", as you said), not +2 years later (as the numbers say)'

First off, you were looking at receipts and making a statement about GDP. "A" is not "B" unless A/|A| = B/|B|.

Second, you have no basis for claiming "would have been stimulated from 2001" except as pure bull shit.

Third, it is demonstrated that GDP was stimulated from 2001.

Moving on,

Fourth, that GDP is correlated with spending, not taxes, is not just "prima facie", it is "in faciem".

Fifth, as receipts came after GDP, the receipts cannot cause GDP. This is how causality works.

Sixth, your BS is all "in caput".

Seventh, consumption has not been "quasi-constant". You have never looked at consumption in order to make a statement of fact. Even then, it means nothing.

Eighth, GDP !~= G/#. It is not mathematically, it is not approximately, it is not really true. You have made up bullshit to confirm your bias. At least, if your going to do confirmation bias, come up with something real.

Ninth, if the moon was made of green cheese, then it would be populated by giant mice. You would do better saying that if the moon was not bade of green cheese then it would not be populated by giant mice.

Tenth, the simplest explanation is that delta-spending caused delta-GDP and tax cuts cause declining receipts until GDP was high enough to offset it. it. It is ludicrous to come up with some complicated explanation of "if this hadn't happened, then it would have been...", "if this were so, then ....", or "if we flip this around, turn this over, stick these things in there, approximate these four things, then assume that these are negligible...."

Lastly, there is no point in adding "AD" because no one is going to mistake it for "BC". That is purely you mentally jerking off.

It would be tolerable, from someone else. For you, it speaks to your cognitive process. Faced with the reality that the GDP and the government outlays are identical in form, you choose to ignore the obvious, "prima facie", "in faciem" for "a priori", "in caput" and "in animo".

Clearly, you don't really mean "prima facie" as a method of reason and logic as you don't actually act on it.

 

[Foxfyre]

It is important to know that the 2001 tax reforms were to be gradually phased in over a number of years. And when that policy was passed by Congress, they had no way of knowing that the country would be turned upside down for a time in the 9/11 attacks that greatly exacerbated what would otherwise have likely been a mild recessionary period. President Bush and other congressional leaders wanted a much more aggressive tax reform than what was passed at that time, but got what they could at the time. If they had insisted on more, there were enough Senators who balked who would have blocked it.

The subsequent 2003 tax reform legislation added some additional important provisions--the capital gains tax reduction and more favorable expensing allowances were a huge boon to small business--but that legislation also cancelled the phase in portion of the 2001 legislation and made all those applicable immediately. And THAT is when the economy took off.

The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury. The rich were paying more into the national treasury than ever before and were proportionately contributing more in tax revenues than anybody else.

And all that says is the critics who claim that the Bush tax cuts created the deficits from 2000 to 2008 is just not so. What created the deficits was Congressional spending that exceeded even the greatly increased revenues. It is not tax policy. It is not benefits for the 'rich'. It is not corportate welfare. It IS government SPENDING that causes ALL deficits.

 

[Widdekind]

Tax revenue increased from 2003; GDP and Government expenditures co-increased from 2001; prima facie, GDP growth reflected Government spending, from 2001-2003, after which GDP growth reflected Government spending "plus some more" which "more" resembles Tax revenues.

the fundamental equations are

GDP = C+I+G + NX = C + S + T​

you can inter-change total vs. per-capita figures, as long as you compare year-by-year, so that the latter is the former all divided by the same number (GDP/# = C/# + I/# + G/# + NX/#).

From 2001-2003, growth of GDP (on LHS) resembles growth of G (on RHS), suggesting that the latter drove the former; after 2003, growth of GDP (on LHS) resembles growth of T (on RHS), suggesting that increasing Tax revenues accounted for much of the GDP growth. Between Government spending, and Government Taxings, after 9/11, US GDP growth seems to have been fueled by Government.

some other implications, e.g. Consumer spending did not drive GDP growth, i.e. Consumer spending was more-or-less constant w/o increasing, would be worthwhile to investigate, for those who have the time

 

[itfitzme]

It is important to know that the 2001 tax reforms were to be gradually phased in over a number of years. And when that policy was passed by Congress, they had no way of knowing that the country would be turned upside down for a time in the 9/11 attacks that greatly exacerbated what would otherwise have likely been a mild recessionary period. President Bush and other congressional leaders wanted a much more aggressive tax reform than what was passed at that time, but got what they could at the time. If they had insisted on more, there were enough Senators who balked who would have blocked it.

The subsequent 2003 tax reform legislation added some additional important provisions--the capital gains tax reduction and more favorable expensing allowances were a huge boon to small business--but that legislation also cancelled the phase in portion of the 2001 legislation and made all those applicable immediately. And THAT is when the economy took off.

The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury. The rich were paying more into the national treasury than ever before and were proportionately contributing more in tax revenues than anybody else.

And all that says is the critics who claim that the Bush tax cuts created the deficits from 2000 to 2008 is just not so. What created the deficits was Congressional spending that exceeded even the greatly increased revenues. It is not tax policy. It is not benefits for the 'rich'. It is not corportate welfare. It IS government SPENDING that causes ALL deficits.

God forbid that someone might present GDP, middle class income schedules, consumer price index, government expenditures AND receipts, or every manner of actual facts. Certainly, there is no purpose for actually presenting the factual data in the form of a chart or graph. Why would anyone want to look at those? We wouldn't want facts to get in the way of the story. Actual evidence only confuses the story.

After all, a good story can be told without bothering with those actual facts.

And even more so, by all means, don't bother actually presenting any evidence to back up the half dozen or so measurable claims that you make. We wouldn't want to bother with data, graphs, or chart that shows the economy booming, inflation in check, tax revenues, the rich paying more, or contributing proportionally more, etc. After all, if we throw in "inflation was in check", an easy fact to check, then we can just believe that all the rest are true.

And while Deficit equals Receipts minus Outlays, it is clear that Receipts cannot possibly be part of the equation. I mean, really, if it was part of the equation, then it would be in the equation.

After all, why bother with messy knowledge when simply believing will do. Just think of a wonderful thought, any happy little thought, think of Christmas, think of snow, think of Santa, don't you know, like reindeer in the sky, we can lie, we can lie, we can lie, we can lie, we can lie....to ourselves at least, without bothering with facts.

Opinions with out facts are like a pen without ink.

 

[itfitzme]

It is important to know that the 2001 tax reforms were to be gradually phased in over a number of years. And when that policy was passed by Congress, they had no way of knowing that the country would be turned upside down for a time in the 9/11 attacks that greatly exacerbated what would otherwise have likely been a mild recessionary period. President Bush and other congressional leaders wanted a much more aggressive tax reform than what was passed at that time, but got what they could at the time. If they had insisted on more, there were enough Senators who balked who would have blocked it.

The subsequent 2003 tax reform legislation added some additional important provisions--the capital gains tax reduction and more favorable expensing allowances were a huge boon to small business--but that legislation also cancelled the phase in portion of the 2001 legislation and made all those applicable immediately. And THAT is when the economy took off.

The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury. The rich were paying more into the national treasury than ever before and were proportionately contributing more in tax revenues than anybody else.

And all that says is the critics who claim that the Bush tax cuts created the deficits from 2000 to 2008 is just not so. What created the deficits was Congressional spending that exceeded even the greatly increased revenues. It is not tax policy. It is not benefits for the 'rich'. It is not corportate welfare. It IS government SPENDING that causes ALL deficits.

It is important to know that the 2001 tax reforms were to be gradually phased in over a number of years.

That appears to be so.

And when that policy was passed by Congress, they had no way of knowing

Meaningless.

that the country would be turned upside down

Not true. The country consisted of 7.7 million businesses with some 160 million people, in a population of over 360 million, covering a land mass of some 4000 miles from sea to shining sea. And as emotionally traumatizing as it was, the country was not turned upside down. 3000 souls were lost and we mourned for a full year. But the GDP didn't hiccup on it. And you know why? Because were American's and we don't roll over and play dead.

You know, it's just insulting.

for a time in the 9/11 attacks that greatly exacerbated what would otherwise have likely been a mild recessionary period.

Not true. It was the weakest "recession" in the history of recessions. And even then, it barely even went negative for both quarters that were not even consecutive.

President Bush and other congressional leaders wanted a much more aggressive tax reform than what was passed at that time, but got what they could at the time.

Probably true but meaningless.

If they had insisted on more, there were enough Senators who balked who would have blocked it.

Perhaps true but still meaningless. And, if they had gotten it, then the deficit would have been even higher.

The subsequent 2003 tax reform legislation added some additional important provisions

Opinion without measurable data to demonstrate "important".

--the capital gains tax reduction

Meaningless. Capital gains tax reductions are simply meaningless as far as the GDP is concerned. The majority are not investment. But I can see why you like them.

and more favorable expensing allowances were a huge boon to small business

I'll buy that, but it still needs proof. And that damn alternative minimum tax was a f'up.

--but that legislation also canceled the phase in portion of the 2001 legislation and made all those applicable immediately.

I'm beginning to doubt your facts, but I'll take your word for it.

And THAT is when the economy took off.

Not true. But, seeing as facts are kind of meaningless to you, I suppose you can believe what you like.

The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact

Not true. The data are the facts. GDP or middle class income schedules or whatever other charts and graphs are the facts. Facts are knowledge. No data, no GDP or middle class income schedules or whatever other charts or graphs are no facts. No facts are no knowledge. No knowledge is belief. Belief is hope and fantasy.

that the economy was booming,

So, but not for the reason you state.

inflation was in check,

That is the job of the Federal reserve, it's meaningless.

and tax revenues were pouring into the national treasury.

That's absolutely not true. Even at the peak in 2007 tax revenues were far below what they were in 2000, on a per capita real dollar basis. But I can see how you fool yourself into thinking they were pouring in, after all, by 2003 they were down as low as they were in 1996. When your at the bottom, the only place to go is up. And it sure does seem like they are booming, compared to almost nothing.

The rich were paying more into the national treasury than ever before

Doubtful, but my knowledge depends on actual facts, not suppositions based on false postulates. We wouldn't expect you to actually

and were proportionately contributing more in tax revenues than anybody else.

But why bother with actual data that show this. This will be interesting to see if it is true, and even so, what's the point here? As we are beginning by ignoring any manner of actual facts, there seems no reason for considering if they should or not.

And all that says is the critics who claim that the Bush tax cuts created the deficits from 2000 to 2008 is just not so.

It doesn't because it is unproven and mostly wrong based on the demonstrated facts.

What created the deficits was Congressional spending that exceeded even the greatly increased revenues.

What created the deficit Receipts minus Outlays.

It is not tax policy.

Of course it is, that is the Receipts part.

It is not benefits for the 'rich'. It is not corportate welfare.

Spin and spin. It's spin whether you call it "is" or "not".

It IS government SPENDING that causes ALL deficits.

Wrong. But you need to do algebra to get that deficits are caused by both outlays and receipts. All your doing is expressing an opinion that outlays should be lower. Funny to because the growth beginning in 2001 was caused by outlays, not tax cuts.

You can live in a fantasy land if you like, but don't expect everyone else to. Many of us like to begin with reality then see what it says. We like starting with the fact then taking our knowledge from there.

Interpretation of the facts. And, as I live and breath, every time I go after the data, in an attempt to actually demonstrate the facts of statements like these, I inevitably fail miserably. They turn seldom turn out to be correct.

All you have are a few events then a bunch of suppositions of what GDP and tax receipts should have done, in your opinion, when, in fact, they did not. And, by your own admission, you don't bother with actual data. Unless you personally know a statistically relevant sample of people out of 7.7 million businesses and 160+ workers, your anecdotal experience means nothing.

But it sure is a nice sounding story.

I am beginning to get where your position is. You don't like paying taxes. You like the services, but you don't like the taxes. I take it that math isn't one of your strong suits and Excel is out of the question.

 

[itfitzme]

Tax revenue increased from 2003; GDP and Government expenditures co-increased from 2001; prima facie, GDP growth reflected Government spending, from 2001-2003, after which GDP growth reflected Government spending "plus some more" which "more" resembles Tax revenues.

the fundamental equations are

GDP = C+I+G + NX = C + S + T​

you can inter-change total vs. per-capita figures, as long as you compare year-by-year, so that the latter is the former all divided by the same number (GDP/# = C/# + I/# + G/# + NX/#).

From 2001-2003, growth of GDP (on LHS) resembles growth of G (on RHS), suggesting that the latter drove the former; after 2003, growth of GDP (on LHS) resembles growth of T (on RHS), suggesting that increasing Tax revenues accounted for much of the GDP growth. Between Government spending, and Government Taxings, after 9/11, US GDP growth seems to have been fueled by Government.

some other implications, e.g. Consumer spending did not drive GDP growth, i.e. Consumer spending was more-or-less constant w/o increasing, would be worthwhile to investigate, for those who have the time

after which GDP growth reflected Government spending "plus some more" which "more" resembles Tax revenues.

Does not.

so that the latter is the former all divided by the same number (GDP/# = C/# + I/# + G/# + NX/#)

So? What's the point? That GDP/# = (C + I + G + NX)/#?

growth of GDP (on LHS) resembles growth of T

Does not, suggesting nothing. Certainly, your not suggesting that increased tax revenues caused GDP growth? That cause and effect hing is kind of hard for you?

Consumer spending did not drive GDP growth

Wrong. The data doesn't support this. You know what, making a statement base on no evidence is lying.

Consumer spending was more-or-less constant w/o increasing

You just bs all this without looking at anything.

would be worthwhile to investigate, for those who have the time

I have.

 

[Foxfyre]

Still pondering Itfitzme's comment that deficits are caused by revenues.

(Had to work to dig that out of the ad hominem and statements that he cannot support with anything. )

 

[itfitzme]

Still pondering Itfitzme's comment that deficits are caused by revenues.

(Had to work to dig that out of the ad hominem and statements that he cannot support with anything. )

And yet you support nothing.

While I presented actual facts, you presented no facts, then I correctly state that you presented no facts, then you incorrectly state I don't present facts.

As you reject actual facts, I certainly cannot support anything in your opinion. But there is an issue, neither can you seeing as you have eliminated actual data, facts, as a means of supporting statements.

The funny thing is, my motivation to collect those facts was to demonstrate the facts that you fail to present. You suggested that the GDP grew due to the tax cuts and that the deficit was due to the outlays. This presented a good opportunity to examine the facts. And it doing so, they clearly show that the GDP is most like the outlays and the deficit is most like the tax revenues, or lack there of. The facts are simply what they are.

In reality, deficit = revenue - outlays. The cause of deficit is both revenue and outlays. It is just that simple. If you don't work and you charge on your credit card then the cause is a lack of income combined with expenses.

I already presented GDP along with revenues and outlays. Those are facts. The conclusion is drawn from them, not by starting with the conclusion then collecting marginally connected events while rejecting the actual data.


Now, what you are referring to, in saying "The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury" is not clear from your comment. But seeing as I recently presented a chart that demonstrates the GDP is correlated best with outlays and not revenues, it's not a stretch of the imagination, to infer that you are, in fact, referring to my post. And, contrary to your statement, none of it or my presentation of interpretation, indicated anything about inflation. Nor did it indicate that GDP was not "booming". It does, though, clearly show that tax revenues were not "pouring into the treasury", an interpretation that you make without reference to anything. Perhaps you mean by comparison to 1772.

Curiously though, terms like "nay sayer" are ad hominum when evidence is presented that clearly contradicts your opinion.

Regarding causality, the deficit equals revenues minimum outlays. It is a simple accounting fact. The causes of a deficit are revenues and outlays.

An "ad hominum" attach would be the rejection of your statements based on some irrelevant and personal attribute or sticking you into a group that invokes a feeling of disdain. Pointing out that you reject actual evidence and facts isn't an ad hominum attack. It is simply restating what you presented. Classifying your presentation as a nice story, a fairy tale, is simply describing it in terms of your statement. A story without data is a nice fairy tale. And while there is no doubt that you present some actual facts, that your story is loosely based on reality doesn't make it any less then a nice story.

Here is the difference between ad hominum and not ad hominum.

You give a presentation based on a couple of events, then add in all sorts of unsupported interpretations. I present evidence that the interpretations are, in fact, directly contradicted by the evidence. Then I say your a story teller. That is not ad hominum because I addressed your interpretation on their own. I only described your presentation as a story based on having previously demonstrated that it is spun out of a complete lack of evidence. I'm not saying that your interpretation is wrong because you are a story teller, I'm saying that the fact that you don't present any evidence, reject actual data, then spin a story around non-events is story telling.

On the other hand, I present evidence that the GDP growth began simultaneously with the increased outlays and that shows that tax revenues are clearly not similar to the GDP. You simply reject them as "all the graphs and charts they want" then you refer to those that find your presentation lacking as "nay sayers". You ignore the actual data, rejecting any that is contrary to your opinion as support your feeling by classifying them as "nay sayers".

It's a subtle difference, I know. It has to do with the order of events. It is a causality thing in the context. And, given that this indicates a tendency to not recognize the importance of order in causality, I can safely suggest that you have a reasoning issue in being unable recognize fundamental requirement for causality. This is not ad hominum. I'm not saying that your inability to recognize causality makes your claims incorrect. I am saying that the body of evidence that demonstrates a mis-interpretation of causality is evidence that you are unable to recognize it. The generalization of your behavior is based on the evidence.

It is perfectly clear, that in your fantasy land, no one could possibly support anything.

And I'm drawing that conclusion based on 1) what you said 2) having spent considerable effort in attempting to demonstrate facts that support your position.

After all, the only relevant evidence are meaningless non-events like "President Bush and other congressional leaders wanted a much more aggressive tax reform". That is great that they "wanted" something. What is even more great is that you actually know President Bush and other congressional leaders so you can provide such evidence based on actual experience. Even better is that you can actually read their mind so that you have certain knowledge of what they want.

That is what we need, more facts about things that didn't actually happen but that someone wanted to happen. Then we can abduct our way into the exact story that we like.

Perhaps the GDP rose because they wanted it to. If we all just hold hands, sing Kumbaya, and pray then the GDP will rise again next month.

It reminds me of my dog. Every day, a mother and daughter pass our house, walking home from the school. And every day, my dog runs to the window, barking incessantly. And by God, that mother and her daughter have never approached the house.

 

[Widdekind]

GDP = C+I+G + NX ("macro-economic formulation")
= C + S + T ("micro-economic 'house-holds' formulation")​

• from 2001-2003, GDP grew in tandem with Government expenditures, implying that the latter drove the former, ceteris paribus ("all else on equal par-ity")
• after 2003, GDP grew faster than Government expenditures, growing as fast as Government Tax revenues

prima facie, in the wake of 9/11, and the invasions of Afghanistan (2001) & Iraq (2003), Government (military?) expenditures drove GDP growth, implying other factors, e.g. Consumer spending, were less important (which would be worth investigating).

(if anybody else has time to do so, please share, before i do so)
FRED Graph - FRED - St. Louis Fed

 

[itfitzme]

GDP = C+I+G + NX ("macro-economic formulation")

GDP = C + S + T ("micro-economic 'house-holds' formulation")

from 2001-2003, GDP grew in tandem with Government expenditures, implying that the latter drove the former,

after 2003, GDP grew faster than Government expenditures, growing as fast as Government Tax revenues

in the wake of 9/11, and the invasions of Afghanistan (2001) & Iraq (2003),

Government (military?) expenditures drove GDP growth, implying other factors, Consumer spending, were less important (which would be worth investigating).

Be careful as that the graph does not have a vertical scale. There is no telling what the actual scale is for each. Obviously, GDP is like five times that of government expenditures. The graph is purely for the purpose of comparing the general trends of the curves.

GDP = C + S + T ("micro-economic 'house-holds' formulation")

Do you have a reference for that?

"GDP grew ... growing as fast as Government Tax revenues"

doesn't seem right. It seems to implies that GDP was caused by government revenues which is obviously non-sense. Tax revenues would be caused by GDP growth. I'm not one to easily conclude a causal direction, as it is to easy to be wrong, but in this case, I'm pretty confident about it.

I am all for tax cuts to small and medium businesses when growth is low and they need the boost. I tend to believe that they will kick start things until the market leaders like B of A manage to suck the life out of them again. And frankly, if were going to do tax cuts, it should be at the lower levels up. BP and Chevron doesn't seem to need it.

If anything, if in fact tax cuts boost GDP, we would expect revenues to go down as GDP shows a definitive upward trend. That is the idea, isn't it, revenues are lower and left in the private sector giving businesses the needed capital to reinvest so GDP then climbs faster. It gets complicated by feedback and growth.

For all we know, the earlier cuts were not enough for growth but enough to show up in revenue. Then the later tax cuts did much better.

The problem is, and my constant point, tax cuts have always been accompanied by increased spending. As such, it is simply not possible to be sure that it was one, the other or both. I am not sure we really want to find out. But the way one does testing is to keep on variable constant while changing the other. Otherwise, it takes a bit of a statistical analysis to differentiate out the two.

It would be nice to understand what caused the bath tub shape of the tax revenues, aside from the general sense that there were tax cuts and growth. That's all fine and dandy but doesn't say much when there are continuous scales and multipliers.

Seeing as, when we speak of these things, measurable GDP, revenues and outlays is all we got. It is the big picture. While it is rather boring without the story behind it, the story has to fit into it. There is no other way.

It does, though, speak to the fact that the revenues did not come pouring in. They never even achieve the level that they were at in 2000, on a per capita real dollar basis. Clearly, if they were pouring in, they would have been more than the 2000 level on a per capita real dollar basis.

"Consumer spending, were less important (which would be worth investigating)"

Consumer spending has had this continuous and steady upward trend, on a real dollar per capita basis. It hasn't been, until the 2007

The following is the full range of consumption expenditures of the GDP for 1969 forward, for 1998 through 2006, and as a percentage of the GDP.

The reality check of the data is the 2007 recession, clearly visible in the larger time period. It is in nominal, absolute dollars.

The years of 1998 through 2006 show it steadily upward with no significant variability off of the general trend. The variability seen is simply seasonal or some random variation. It is in real dollars per capita.

The percentage of the GDP is interesting. Looking at the other two, nothing remarkable is apparent. Then, when looked at as a percentage of the GDP, it becomes more interesting.

Keep in mind, that is a percentage of the GDP and the GDP did continue to grow. So consumption did grow, but after 2003, it kind of trended down just a tad but not so much so you might call it a constant percentage.

Just for the heck of it, I will throw up the government outlays as a percentage of the GDP.

I am still amazed that it is such a large percentage. I didn't know.

Is the G in C+G+I+XN the same as government outlays? Shouldn't it be? and if not, why not?

 

[Widdekind]

simplistically, GDP growth tracked Government expenditures from 2001-2003, whilst increases in Consumption offset decreases in Net Exports (see below); after 2003, GDP growth outpaced Government expenditures, even as Consumption leveled-off, and as Net Exports continued to decrease, so that Investments presumably "took up the slack". I.e. "from the hip" i would predict rising Investments after 2003; Investments reflect loans, for capital, to businesses, from savers with Money -- where foreign creditors lending Money after 2003 ??

GDP = C+I+G + NX

GDP: increasing from 2001
C: increasing to 2003, constant there-after
G: increasing from 2001

NX: decreasing to 2008 (see below)​

(fisher-investments & market-minder)​

 

[Widdekind]

GDP = C+I+G + NX ("macro-economic formulation")

GDP = C + S + T ("micro-economic 'house-holds' formulation")

Do you have a reference for that?

Twin deficits hypothesis - Wikipedia, the free encyclopedia

is the G in C+I+G + NX the same as Government outlays?

according to Wikipedia, so that (T-G) = Government budget (revenues - expenditures).

the "micro" formulation confuses me, if "T" is total Taxes paid by HHs, then what about non-personal Taxes, e.g. business Taxes ?? If you account "T" only from private HHs; then use that "T" in "T-G"; then you have not accounted for corporate Tax flows. Perhaps "corporations" must be accounted, as "individual persons", as indeed they legally are ?? If so, would "corporate Consumption" include capital "Investments" ?? (i hope there are books you can buy that are better than Wikipedia)

(as an earth ape, 99% as dumb as chimpanzees, and 95% as dumb as gorillas, i need "simple"; the "micro" HH formulation, of the Income/Expenditure equation, seems to sum, over all "Tax-paying persons"; if "corporations" are not truly "persons", then (logically) they should neither vote, nor pay Taxes; that Taxes target businesses smacks more of "opportunism for OPM" than any logically sound economic or political principle; i may now be opposed, according to "political principles" [which i won't really understand]; "follow the money, man, and make more of it" [and "knowing [what economics equations imply] is [the first] half of the battle"])

 

[Foxfyre]

Still pondering Itfitzme's comment that deficits are caused by revenues.

(Had to work to dig that out of the ad hominem and statements that he cannot support with anything. )

And yet you support nothing.

While I presented actual facts, you presented no facts, then I correctly state that you presented no facts, then you incorrectly state I don't present facts.

As you reject actual facts, I certainly cannot support anything in your opinion. But there is an issue, neither can you seeing as you have eliminated actual data, facts, as a means of supporting statements.

The funny thing is, my motivation to collect those facts was to demonstrate the facts that you fail to present. You suggested that the GDP grew due to the tax cuts and that the deficit was due to the outlays. This presented a good opportunity to examine the facts. And it doing so, they clearly show that the GDP is most like the outlays and the deficit is most like the tax revenues, or lack there of. The facts are simply what they are.

In reality, deficit = revenue - outlays. The cause of deficit is both revenue and outlays. It is just that simple. If you don't work and you charge on your credit card then the cause is a lack of income combined with expenses.

I already presented GDP along with revenues and outlays. Those are facts. The conclusion is drawn from them, not by starting with the conclusion then collecting marginally connected events while rejecting the actual data.


Now, what you are referring to, in saying "The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury" is not clear from your comment. But seeing as I recently presented a chart that demonstrates the GDP is correlated best with outlays and not revenues, it's not a stretch of the imagination, to infer that you are, in fact, referring to my post. And, contrary to your statement, none of it or my presentation of interpretation, indicated anything about inflation. Nor did it indicate that GDP was not "booming". It does, though, clearly show that tax revenues were not "pouring into the treasury", an interpretation that you make without reference to anything. Perhaps you mean by comparison to 1772.

Curiously though, terms like "nay sayer" are ad hominum when evidence is presented that clearly contradicts your opinion.

Regarding causality, the deficit equals revenues minimum outlays. It is a simple accounting fact. The causes of a deficit are revenues and outlays.

An "ad hominum" attach would be the rejection of your statements based on some irrelevant and personal attribute or sticking you into a group that invokes a feeling of disdain. Pointing out that you reject actual evidence and facts isn't an ad hominum attack. It is simply restating what you presented. Classifying your presentation as a nice story, a fairy tale, is simply describing it in terms of your statement. A story without data is a nice fairy tale. And while there is no doubt that you present some actual facts, that your story is loosely based on reality doesn't make it any less then a nice story.

Here is the difference between ad hominum and not ad hominum.

You give a presentation based on a couple of events, then add in all sorts of unsupported interpretations. I present evidence that the interpretations are, in fact, directly contradicted by the evidence. Then I say your a story teller. That is not ad hominum because I addressed your interpretation on their own. I only described your presentation as a story based on having previously demonstrated that it is spun out of a complete lack of evidence. I'm not saying that your interpretation is wrong because you are a story teller, I'm saying that the fact that you don't present any evidence, reject actual data, then spin a story around non-events is story telling.

On the other hand, I present evidence that the GDP growth began simultaneously with the increased outlays and that shows that tax revenues are clearly not similar to the GDP. You simply reject them as "all the graphs and charts they want" then you refer to those that find your presentation lacking as "nay sayers". You ignore the actual data, rejecting any that is contrary to your opinion as support your feeling by classifying them as "nay sayers".

It's a subtle difference, I know. It has to do with the order of events. It is a causality thing in the context. And, given that this indicates a tendency to not recognize the importance of order in causality, I can safely suggest that you have a reasoning issue in being unable recognize fundamental requirement for causality. This is not ad hominum. I'm not saying that your inability to recognize causality makes your claims incorrect. I am saying that the body of evidence that demonstrates a mis-interpretation of causality is evidence that you are unable to recognize it. The generalization of your behavior is based on the evidence.

It is perfectly clear, that in your fantasy land, no one could possibly support anything.

And I'm drawing that conclusion based on 1) what you said 2) having spent considerable effort in attempting to demonstrate facts that support your position.

After all, the only relevant evidence are meaningless non-events like "President Bush and other congressional leaders wanted a much more aggressive tax reform". That is great that they "wanted" something. What is even more great is that you actually know President Bush and other congressional leaders so you can provide such evidence based on actual experience. Even better is that you can actually read their mind so that you have certain knowledge of what they want.

That is what we need, more facts about things that didn't actually happen but that someone wanted to happen. Then we can abduct our way into the exact story that we like.

Perhaps the GDP rose because they wanted it to. If we all just hold hands, sing Kumbaya, and pray then the GDP will rise again next month.

It reminds me of my dog. Every day, a mother and daughter pass our house, walking home from the school. And every day, my dog runs to the window, barking incessantly. And by God, that mother and her daughter have never approached the house.

All I said is that after the 2003 tax reform, that also accelerated the gradual phase in of the 2001 tax reform, the revenues poured into the national treasury. And I DID provide support for that. My comments were purely to emphasize that it was NOT the Bush tax policy or 'tax cuts for the rich' that erased the Clinton surplus and created the deficits that occurred during the Bush administration.

But people like you insisted on rebutting that with irrelevent and presumable 'scientific' focus on GDP et al. You absolutely did not rebut my statement which was the treasury revenues substantially increased; therefore it was not the Bush tax policy that created the deficits.

I further insisted that it is government SPENDING that causes deficits. There is absolutely nothing else that can cause deficits. Deficits occur because government spends more than it takes in.

And you, in your frenetic attempt to discredit my comments, brilliantly made the comment that revenues caused the deficits. Which still looks absurd on the face of it.

 

[itfitzme]

GDP = C+I+G + NX ("macro-economic formulation")

GDP = C + S + T ("micro-economic 'house-holds' formulation")

Do you have a reference for that?

Twin deficits hypothesis - Wikipedia, the free encyclopedia

Yes, nice find. "house-holds formulation" seems like a reasonable term for it. "micro-economic" does not seem reasonable. "micro-economic" is a study of specific markets. "macro-economics" is a study of the aggregate performance of the economy, including the aggregate performance of the markets. One way of looking it is like this;

The EOE, MV=PQ is an aggregate of all markets. Within that are individual markets

GDP = PQ_Oil + PQ_Television + PQ_HealthInsurance + PQ_other_markets.

Micro-economics studies, among other things, the performance of the individual markets like PQ_Oil. PQ is the equilibrium point of the supply and demand simultanious equations. Within that PQ_Oil is BP, Chevron, Texaco, Arco, Exxon, etc. They provide substitutes.

GDP = C + S + T is still an aggregate function, making it a macro-economic formulation.

is the G in C+I+G + NX the same as Government outlays?

according to Wikipedia, so that (T-G) = Government budget (revenues - expenditures).

Confirmed.

the "micro" formulation confuses me, if "T" is total Taxes paid by HHs, then what about non-personal Taxes, e.g. business Taxes ?? If you account "T" only from private HHs; then use that "T" in "T-G"; then you have not accounted for corporate Tax flows. Perhaps "corporations" must be accounted, as "individual persons", as indeed they legally are ?? If so, would "corporate Consumption" include capital "Investments" ?? (i hope there are books you can buy that are better than Wikipedia)

You have to do the flow diagrams. The flow is a closed system, closed loop with no sources or sinks. A surface can be placed such that it cuts through the flow at any location. Properly constructed, the sum of all the flows through that surface are GDP. Making flow diagrams, repeatedly, is a necessary exercise. I expect I will be doing one again. Different flow diagrams, with the elements significantly different, remain equivalent as long as they are constructed within the context of the identical closed system, closed loop with no sources or sinks. As such, any surface that cuts through the flow at any location are identical between each flow diagram.

The diagram must differentiate between businesses that supply end use products and businesses that supply intermediate product. On the supply output side of GDP, only end use products are accounted for in the CGIMX version. The CGIMX is an accounting for all the flow through the surface of which domestic output is on one side and consumption is on the other side. This is confligrated by the fact that imports are commingled with domestic output at the point of consumption. Essentially, between domestic output and consumption is C+G+I+X, foreign consumers being simply another consumer. As such, the surface is extended to capture imports and subtract them out.

On the other side of the supply, all GDP is also income for households. I haven't done this one yet, but I suspect it may be easier as a separate diagram, organized a bit differently. On the expense side of households, all that income is expended as C + T + S.

I absolutely get the question of how C has to have imports removed from one version while not in the other. Without going through the elements and construction of the flow diagrams, it isn't clear to me. Still, I am 100% confident that, when I finally do, it will become obvious.

Indeed, as you pointed to it, I realized that the C + T + S version is simpler and less confounded. The CGIMX version is forced by available accounting books to put it together.

hope there are books you can buy that are better than Wikipedia.

Yes, Wikipedia can suffer from a) being to much of just an overview and b) written by experts at a level only a couple of steps below their expertise. It is an Encyclopedia and is therefor just a summary.

A current college text is the absolute best. You might consider finding the appropriate class listing for macro econ at a state university and ordering that book. Get one that suits your math skills. Advanced state university and all manner of private universities like MIT will use calculus. Intermediate state colleges will use algebra. Algebra is, for most people, easier to read. It is difficult to teach oneself. We don't know what level we are at and how the concepts build. I have often found myself overwhelmed in having picked up a text that was too advanced, lacking the fundamentals and lacking a vision of what was really important.

I added the link, in my signature, to a college text written by an MIT professor of economics. Fundamental texts do not address every question, that may arise, specifically. They do provide a comprehensive set of fundamental tools with which to construct an answer. And, care must be made to ensure that 1) understanding is correctly applied and 2) that the principle isn't over extended.

It all comes down to getting enough clues from the fundamentals to be able to then construct personal models. It is also useful to study physics to get an understanding of how physical models have been realized. Getting a model, whether it be one's mental picture, a schematic, or a mathematical model that is comprehensive, closed, and solidly connected to the natural world is a skill.

Here is an exchange model

Here is the exchange model expanded to capture the changing nature of the MV=PQ model. MV=PQ can refer to M_base*V_base, M1*Vm1, M2*Vm2. The expanding boundaries to demonstrates that, regardless, nothing else changes in the consideration except the M and V definition. I left out a couple of the information paths, like Mb to M2. It may not be detailed enough, but it is along the right lines. The trick is to get exactly who talks to whom about what such that the funds are triggered to move.

Some where, I have some flow diagrams for that view of GDP = MV = PQ and GDP = C + G + I + X - M. I still need a GDP = S + T + C.

It is absolutely essential to get the connection to the physical reality perfect because one mis-step throws everything off.

Considerations must include the well defined diagram and schematic, the mathematical model, the actual normalized data in a visual format before the story can be applied.

I have seen every manner of mis-step, especially in attempting to use the "logical" structure of language to construct an manipulate a model. The fact is that the structure of language has insufficient constraints and every manner of insane conclusions can be reached in doing so.

We are of two minds, one being objective and one being subjective. Ideas are the combination of an object and feeling. Connectivity between objects based on feeling is subjective, not objective, and leads to irrational conclusions. The only rational conclusions come out of constraining the reasoning along objective lines. Even manipulation of mathematics can do the same, though less often.

The term "opportunistic" is primarily a subjective and emotional term. All economic behavior is opportunistic. There is an opportunity to gain utility from a set of circumstances. As typically used, "opportunistic" is used to tag a particular economic behavior as "bad". There is no "bad" in positive economics. There can be "bad" in normative but it depends on a world view foundation.

The only way to get a sound understanding is to utilize all of our tools and ensuring that they are all constant in the final conclusion.

(as an earth ape, 99% as dumb as chimpanzees, and 95% as dumb as gorillas, i need "simple"; the "micro" HH formulation, of the Income/Expenditure equation, seems to sum, over all "Tax-paying persons"; if "corporations" are not truly "persons", then (logically) they should neither vote, nor pay Taxes; that Taxes target businesses smacks more of "opportunism for OPM" than any logically sound economic or political principle; i may now be opposed, according to "political principles" [which i won't really understand]; "follow the money, man, and make more of it" [and "knowing [what economics equations imply] is [the first] half of the battle"])

There is no "any logically sound economic or political principle" that can lead to "that Taxes target businesses smacks more of "opportunism for OPM" because there it isn't a logic issue. Economics is simply a description of how the economy functions and the fundamental philosophical principle is that it works or it doesn't. Political principles are simply that voters get pissed off or don't get pissed off and what policies can be put in place that function economically without pissing off the majority of the voters. And the difference is typically based on one's world view.

I stick with positive economics because it is the foundation of what is called normative economics. Without an understanding of the positive economics, there is no normative economics. Without normative economics, politics simply degrades to what doesn't piss of the voter regardless what is economically sound.

The structure of taxes is really based on what pisses off the voter and what jurisdiction the government entity has. Sometimes it is adjusted for it's effect on economic behavior or performance. From a closed loop general macro economic stand point, it really doesn't matter where the flow is tapped to get the sufficient revenues to fund the common government endeavors. It becomes, rather, an issue of balance between the markets as the value of the dollar is relative between goods and between markets. The specific effect that taxes have is a micro economic issue. Businesses do, in general, use and gain utility from government commons. Roadways facilitate commerce, the military stabilizes business interests overseas. And, while corporations may not seem to be logically individuals, they are comprised of individuals and represent individuals. Shifting taxes from corporate revenues to individual income simply shifts where the flow is tapped thus shifting the determination of wages.

Consider the sales tax. The sales tax is, in principle, a tax paid by the seller. Yet, it is calculated and presented as if it is a tax paid by the purchaser. Logically, it doesn't matter where it is tapped in the flow of funds in the exchange. Interestingly, a comparison of the calculations of the sales tax, between applying it on the price at the point of sale or applying it to the revenue after all the sales are done becomes a matter of a few pennies per product. While it is a tax to the seller and presented as if it is paid by the buyer, in the math of it, presenting it as if it is paid by the buyer saves a couple of pennies. From a macro standpoint, it doesn't matter if the tax is 10% calculated one way or 11% calculated another, the net revenue is the same. And the difference it makes, that the purchaser is aware that the tax is in there has very little meaning. The only thing that may have an economic affect is that taxes do not apply to food. That affects the relative balance between food and other products.

 

[itfitzme]

Still pondering Itfitzme's comment that deficits are caused by revenues.

(Had to work to dig that out of the ad hominem and statements that he cannot support with anything. )

And yet you support nothing.

While I presented actual facts, you presented no facts, then I correctly state that you presented no facts, then you incorrectly state I don't present facts.

As you reject actual facts, I certainly cannot support anything in your opinion. But there is an issue, neither can you seeing as you have eliminated actual data, facts, as a means of supporting statements.

The funny thing is, my motivation to collect those facts was to demonstrate the facts that you fail to present. You suggested that the GDP grew due to the tax cuts and that the deficit was due to the outlays. This presented a good opportunity to examine the facts. And it doing so, they clearly show that the GDP is most like the outlays and the deficit is most like the tax revenues, or lack there of. The facts are simply what they are.

In reality, deficit = revenue - outlays. The cause of deficit is both revenue and outlays. It is just that simple. If you don't work and you charge on your credit card then the cause is a lack of income combined with expenses.

I already presented GDP along with revenues and outlays. Those are facts. The conclusion is drawn from them, not by starting with the conclusion then collecting marginally connected events while rejecting the actual data.


Now, what you are referring to, in saying "The nay sayers can post all the GDP or middle class income schedules or whatever other charts and graphs they can find on the internet and it will not change the fact that the economy was booming, inflation was in check, and tax revenues were pouring into the national treasury" is not clear from your comment. But seeing as I recently presented a chart that demonstrates the GDP is correlated best with outlays and not revenues, it's not a stretch of the imagination, to infer that you are, in fact, referring to my post. And, contrary to your statement, none of it or my presentation of interpretation, indicated anything about inflation. Nor did it indicate that GDP was not "booming". It does, though, clearly show that tax revenues were not "pouring into the treasury", an interpretation that you make without reference to anything. Perhaps you mean by comparison to 1772.

Curiously though, terms like "nay sayer" are ad hominum when evidence is presented that clearly contradicts your opinion.

Regarding causality, the deficit equals revenues minimum outlays. It is a simple accounting fact. The causes of a deficit are revenues and outlays.

An "ad hominum" attach would be the rejection of your statements based on some irrelevant and personal attribute or sticking you into a group that invokes a feeling of disdain. Pointing out that you reject actual evidence and facts isn't an ad hominum attack. It is simply restating what you presented. Classifying your presentation as a nice story, a fairy tale, is simply describing it in terms of your statement. A story without data is a nice fairy tale. And while there is no doubt that you present some actual facts, that your story is loosely based on reality doesn't make it any less then a nice story.

Here is the difference between ad hominum and not ad hominum.

You give a presentation based on a couple of events, then add in all sorts of unsupported interpretations. I present evidence that the interpretations are, in fact, directly contradicted by the evidence. Then I say your a story teller. That is not ad hominum because I addressed your interpretation on their own. I only described your presentation as a story based on having previously demonstrated that it is spun out of a complete lack of evidence. I'm not saying that your interpretation is wrong because you are a story teller, I'm saying that the fact that you don't present any evidence, reject actual data, then spin a story around non-events is story telling.

On the other hand, I present evidence that the GDP growth began simultaneously with the increased outlays and that shows that tax revenues are clearly not similar to the GDP. You simply reject them as "all the graphs and charts they want" then you refer to those that find your presentation lacking as "nay sayers". You ignore the actual data, rejecting any that is contrary to your opinion as support your feeling by classifying them as "nay sayers".

It's a subtle difference, I know. It has to do with the order of events. It is a causality thing in the context. And, given that this indicates a tendency to not recognize the importance of order in causality, I can safely suggest that you have a reasoning issue in being unable recognize fundamental requirement for causality. This is not ad hominum. I'm not saying that your inability to recognize causality makes your claims incorrect. I am saying that the body of evidence that demonstrates a mis-interpretation of causality is evidence that you are unable to recognize it. The generalization of your behavior is based on the evidence.

It is perfectly clear, that in your fantasy land, no one could possibly support anything.

And I'm drawing that conclusion based on 1) what you said 2) having spent considerable effort in attempting to demonstrate facts that support your position.

After all, the only relevant evidence are meaningless non-events like "President Bush and other congressional leaders wanted a much more aggressive tax reform". That is great that they "wanted" something. What is even more great is that you actually know President Bush and other congressional leaders so you can provide such evidence based on actual experience. Even better is that you can actually read their mind so that you have certain knowledge of what they want.

That is what we need, more facts about things that didn't actually happen but that someone wanted to happen. Then we can abduct our way into the exact story that we like.

Perhaps the GDP rose because they wanted it to. If we all just hold hands, sing Kumbaya, and pray then the GDP will rise again next month.

It reminds me of my dog. Every day, a mother and daughter pass our house, walking home from the school. And every day, my dog runs to the window, barking incessantly. And by God, that mother and her daughter have never approached the house.

All I said is that after the 2003 tax reform, that also accelerated the gradual phase in of the 2001 tax reform, the revenues poured into the national treasury. And I DID provide support for that. My comments were purely to emphasize that it was NOT the Bush tax policy or 'tax cuts for the rich' that erased the Clinton surplus and created the deficits that occurred during the Bush administration.

But people like you insisted on rebutting that with irrelevant and presumable 'scientific' focus on GDP et al. You absolutely did not rebut my statement which was the treasury revenues substantially increased; therefore it was not the Bush tax policy that created the deficits.

I further insisted that it is government SPENDING that causes deficits. There is absolutely nothing else that can cause deficits. Deficits occur because government spends more than it takes in.

And you, in your frenetic attempt to discredit my comments, brilliantly made the comment that revenues caused the deficits. Which still looks absurd on the face of it.

Except revenues didn't "pour" into the national treasury except that the had been previously decimated. That is the issue, from the very start. They only "poured" in because they were slashed so dramatically. And they didn't pour in simply because of the cuts. There was deficit spending simultaneously to the tax cuts. That is pretty obvious. That you don't like spending doesn't mean that spending doesn't cause stimulation. And that you like tax cuts doesn't mean that tax cuts don't increase the deficit.

I love tax cuts and hate spending, unless the tax cuts just for the other guy and the spending is for me. But my personal, subjective preferences has nothing to so with the fact that deficit = outlays - revenues.

I never addressed the cause of that decimation. I make this statement to stop you in your tracks from imagining that my statement says more then it does, a habit that your emotionally driven bias forces you into.

But as you mention it, just to be clear, seeing as GDP was rising with outlays from 2001 while receipts plummeted simultaneously, I think we can safely assume it was the tax cuts that decimated the revenues. That is all find and dandy, like spraying a bit of gas into the carburetor when you start the car, if, in fact, the later effect was to drive GDP and thus increase revenues then. That is the idea. But if you want to claim that the tax cuts were later offset by there effect on increasing the GDP then you have to take the reality that they also initially decimated the revenues.

If you empty the tank, then filling it back up again would be, by your classification,"pouring in". But the fact of the matter is that it was the tax cuts that reduced revenues initially. And while they later recovered, they barely reached the level that they were at prior to the peak in previous years. All you're doing is picking a preferred relative reference frame, considering it as a absolute point, so that you can then perceive "pouring in". And you do so without considering per capita real dollar basis. The fact is that, given the expanding population and CPI, they should have been considerably higher, all other things being equal. By any reasonable reference and measure, there is no "pouring in". Just as well, by an reasonable reference, that the GDP was floundering near an average of zero growth, then there is no initial consideration that they should have been pouring in. Still, the fact remains that revenues were initially decimated by the tax cuts. We have no way, initially, to determine what proportion of that recovery was due to the natural recovery, the tax cuts, or the outlays.

All I'm doing is taking the existing data, putting it up for all to see, then describing it based upon your presentation of the events that occurred. And unless I find something viable, or you present something viable, I simply admit that we don't know.

And you provided no support that I have seen. By your statements, that imply actual data is not meaningful, you cannot provide support. The very statement "that with irrelevant and presumable 'scientific' focus on GDP et al" just speaks to the lack of foundation in reality for your story. The fact of the matter is that the facts are the matter. The measures of GDP, Outlays, Receipts, Employment, Population, Inflation, and every manner of "scientific" focus are the facts.

All your manner of presentation has relied on GDP, et al. Except when actually examining it fails to support your conclusion. Then, suddenly, actual measures don't have any meaning. They are the facts that you presume to speak of while then rejecting them entirely because they do not support your a-priori disposition. If, by some great insight into the universe, you don't mean GDP when you speak of growth in tax revenues, by all means do tell what you are measuring. As, for all I am aware of, taxes are on income and earnings which are tied to GDP. Revenues rise and fall on GDP and taxes.

And, by your unwillingness to accept measures of reality, like I said, there isn't a bats chance in hell of rebutting your statements. Not in your mind, at least.

The reality, which you continue to ignore, is that deficit = outlays - revenues. This is exactly what I have repeatedly said.

I did not say, "revenues caused the deficits" and you cannot find a comment of mine to quote. Your only hope is to misrepresent or misquote my statement that deficits are a function of both revenues and outlays. If revenues are less then outlays, then the deficit increases. It is just that simple. The only reason that you think it "looks absurd" on the face of it is because you continue to misrepresent the statement and cannot accept the reality. In your manner of stating it, it implies that increasing revenues increases a deficit. And that, the way you choose to phrase it, is absurd. But that is your absurdity, in choosing that phrase, not mine.

My singular point is that spending alone does not cause deficits. Revenues minus outlays causes deficits if revenues are lower then outlays. It is just that simple.

Nor have I made any statement that remotely implied that decrease in revenues erased the Clinton surplus. You seem to be unable to differentiate between people. This is clearly because you put everyone that disagrees with your lack of reason into a singular category. This simply speaks to a fuzziness in your perception. Nor have I differentiated between what cuts were the predominate effect in the lack of revenues.

But, seeing as you want to expand, let us examine it. Deficits are outlays minus receipts. If outlays were lower then receipts then it would be a surplus. And if receipts were lowered to less then the outlays, then it would decimate the surplus. Just as well, if outlays are raised above the receipts, it would decimate the surplus. And if receipts are lowered while outlays are raised, the they both decimate the surplus. It is Surplus = Receipts - Outlays or (-)Deficit = Receipts minus Outlays or Deficit = Outlays - Receipts.

My point is simply that the economic growth cannot be attributed to simply tax cuts because outlays were increased simultaneously. In the simplest terms, without even considering a multiplier effect, just that G is some 20% of GDP then increasing G will increase GDP. Alone, it's not enough to account for the total growth. But the reality remains that if tax cuts result in more money in the economy for the purpose of increasing output, then adding money in on the expenditure side also increases money in the economy for the purposes of increasing output.

You simply choose to ignore one half of the equation. Which is absurd at the core of it. The most basic foundation is Outlays(-Deficit) = Receipts minus Outlays. And it is so basic as to need no explanation. That you choose to ignore the patently obvious is simply incredible. I would never have fathomed that there are people that choose to ignore reality. And choosing to ignore reality is, by definition, insanity.

If you want to ignore the actual facts as "scientific", that's your problem. I don't discredit you. The facts discredit you. You discredit yourself by choosing to ignore reality.

But don't be terribly surprised if someone calls you on your desire to live in la la land. Which of the three monkeys are you, the one covering it's eyes? "Oh no, that graph just hurts my eyes!"

Oh, and there are no people like me, another point of your emotional and subjective bias. If someone were to say that it was the spending that caused the growth and not the tax cuts, I'd be having the opposite argument, insisting that they provide some evidence of that. And as such, "people like you" is an ad hominum attack.

I'm simply waiting for the day that someone says, "if you look at this, you can see the separate effect" or "the tax multiplier is x and the spending multiplier is y." But as you are simply unwilling to accept that they both have an effect, to some proportion, or that deficits are a function of both outlays and receipts, there seems to be little point in moving on to assuming the spending multiplier and differentiating out the tax effect based on that.

 

[Foxfyre]

And Init, no how big and gray and data filled your posts might be, don't be surprised if people who can read are fully aware that you're blowing a whole lot of smoke without a clue of what you're even arguing about, much less saying.

My statement was to respond to the notion that the Bush tax cuts benefitted only the rich and created massive deficits. I showed that this was not the case. The concept had absolutely nothing to do with ANYTHING other than the fact that it was not the Bush tax cuts that caused the deficits during the Bush administration. As is the case with ALL deficits, it is government SPENDING, not tax revenues, that creates deficits.

If the government spends more than it takes in, there is a deficit.
If the government spends less than it takes in, there is a surplus.

Whatever the reason was, treasury revenues did substantially increase after the Bush tax cuts went into effect. The Bush tax cuts were not a boon for the rich more than they were for the less rich, and the Bush tax cuts, most especially for the rich, did not create the deficits during the Bush administration.

The government spent more than the revenues that were deposited into the treasury. That created the deficits.

Treasury revenues are currently again approaching the highest level of the Bush administration but the government is spending far more than what was spent during the Bush administration. So we have much bigger deficits.

Government spending may or may not have an effect on GDP and/or treasury revenues. But it is spending and nothing but spending over and above whatever revenues there are that creates deficits. And nothing else.

United States Government Revenue History - Charts

 

[itfitzme]

And Init, no how big and gray and data filled your posts might be, don't be surprised if people who can read are fully aware that you're blowing a whole lot of smoke without a clue of what you're even arguing about, much less saying.

My statement was to respond to the notion that the Bush tax cuts benefitted only the rich and created massive deficits. I showed that this was not the case. The concept had absolutely nothing to do with ANYTHING other than the fact that it was not the Bush tax cuts that caused the deficits during the Bush administration. As is the case with ALL deficits, it is government SPENDING, not tax revenues, that creates deficits.

If the government spends more than it takes in, there is a deficit.
If the government spends less than it takes in, there is a surplus.

Whatever the reason was, treasury revenues did substantially increase after the Bush tax cuts went into effect. The Bush tax cuts were not a boon for the rich more than they were for the less rich, and the Bush tax cuts, most especially for the rich, did not create the deficits during the Bush administration.

The government spent more than the revenues that were deposited into the treasury. That created the deficits.

Treasury revenues are currently again approaching the highest level of the Bush administration but the government is spending far more than what was spent during the Bush administration. So we have much bigger deficits.

Government spending may or may not have an effect on GDP and/or treasury revenues. But it is spending and nothing but spending over and above whatever revenues there are that creates deficits. And nothing else.

United States Government Revenue History - Charts

My statement was to respond to the notions that deficits are only caused by outlays, that the tax cuts were the only thing that caused the GDP to increase, and that data in the form of graphs are not the facts.

My statement was that deficits are the result of both revenues and outlays. My post presented the revenues outlays and GDP, showing that the GDP rose in coincident to both increases spending and the initial tax decrease.

I showed that your statements were limited to only including one side of the issue and that your conclusions where therefore faulty. I categorized your entire set of comments as a story based on an a-priori and faulty premise followed by confirmation bias. And, I am truly sorry for those limitations. I think you are an excellent writer, very good with historical events, but are lacking in the willingness to examine the facts that do now fit your predetermined bias.

You apparently have no clue as to what the limitations are to what you are talking about. As to every qualified statement I make, you simply reject evidence and present none. And, surplus(- deficit) = Revenues - Outlays isn't smoke, it's called accounting and algebra. GDP, Outlays, Revenues, Population, and CPI are not smoke, they are actual data.

The concept has everything to do with the fact that the Bush Tax Cuts were a causal element in the deficit. As it is with all deficits, it is both TAX REVENUES and SPENDING.

If the government receives less then it spends, there is a surplus.
If the government spends more then it takes in, there is a deficit.
If the government receives more then it spends, there is a surplus.
If the government spends less then it takes in, there is a deficit.

This alone demonstrates that you continue to insist on only making half of the statements.

Playing word games is stupid. It's easier to just say surplus(- deficit) = Revenues - Outlays. And, that is exactly what the budget says. It says that the surplus(-deficit) is the result of REVENUES AND OUTLAYS.

For whatever the reason was, the treasury revenues did not "substantially increase" and never reached the per capita real dollar level that they had been in 2000.

I simply have no opinion, at this time, if the "The Bush tax cuts [were or] were not a boon for the rich more than they were for the less rich," we cannot even seem to get past the basics. Just as well, I refuse have unqualified opinions spun out of personal preference. Rather, I simply gather the evidence and describe what it shows.

And the Bush tax cuts, whomever they were for, did create the deficits during the Bush administration, as much as the increased spending did. And if we are to put the responsibility for one on a particular office, then we put the responsibility for all on that office. Until someone shows that the Congress and the office of the president are not responsible for passing the entire thing, then they both get credit for whatever they chose to do.

Just as well, there is as much reason to conclude that the spending caused the GDP increase, at least as much as the tax cuts, and was instrumental in realizing the paltry increase in revenues. And, in the end, no manner of fiscal policy seemed to be sufficient to stem the underlying issue that precipitated the recession of December of '07. In my best considerations, the problem was outside the realm of current fiscal policy and the crash was mitigated by monetary policy and the huge increase in spending that began at the end of the Bush administration.

There was a surplus, then there was a deficit. So, a reasonable conclusion is that the combined tax cuts and increased spending erased that surplus. (And there is a point by the MMT guys that the surplus forced the subsequent spending and tax reduction.)

The best we can tell, government spending and tax cuts together have an effect on GDP to help spur it to recovery. And, as government spending is on the order of18 to 25% of the GDP, it is clear that government spending is a constant part of stimulating the GDP. The published multiplier seems to have been confirmed numerous time.

And reducing revenues beneath and below whatever outlays there are create deficits, along with increasing expenses above the reduced revenues, or simply increasing spending above the existing revenues.

(Frankly, a more interesting question is why, for all that effort, was it not sustainable and not as effective as we would have liked. I suspect the answer is structural. For their best efforts with fiscal policy, there are limitations to what can be accomplished in stabilizing the free market when it decides to accumulate systematic risk and go into a balance sheet recession. Another interesting question is how the government managed to get through two decades without any increase in outlays per capita in real dollars while it became necessary to start making substantial increases starting with the Bush administration.)

 

[Widdekind]

...the Bush tax cuts benefitted only the rich and created massive deficits... Whatever the reason was, treasury revenues did substantially increase after the Bush tax cuts went into effect... The government spent more than the revenues that were deposited into the treasury. That created the deficits.

United States Government Revenue History - Charts

... the Bush tax cuts, whomever they were for, did create the deficits during the Bush administration, as much as the increased spending did... as government spending is on the order of 18 to 25% of the GDP, it is clear that government spending is a constant part of stimulating the GDP.

prima facie, Bush was elected in 2000, swiftly cutting Taxes, and reducing Government "revenues". No budget deficit occurred in 2001; but, in the wake of 9/11, Government spending increased, into the "teeth" of falling "revenues". Bush "picked the worst time for a Tax cut" (or, Terrorists picked the best time to force increased spending). Government "revenues" only increased from 2003, perhaps reflecting massive Military appropriations for the Iraq war ? "Bush deficits" derived from decreasing Government "revenues", after Tax-cuts; combined with increasing Government expenditures, due to Terrorism ("Acts of [the avatars of] God"). Note that the "Clinton surplus" derived entirely from increasing Taxes "on the rich" (by popular perception), with zero decreases in spending "on the poor" (by popular perception); "Clinton surpluses" represented "no compromise, gimme my Entitlements" Taxation (by popular perception?). Are such "surpluses" of "revenue" (for the "service" of "not shooting paying Tax-payers"?) "good" politics ("i made them cover all the costs of my welfare (plus some too)") ?