Doc: The paper does indeed say exactly that. In fact, from her paper it says, in the conclusion:
Original working paper is here, conclusion is on page 44 of the PDF: https://eml.berkeley.edu/~dromer/pap...ERJune2010.pdfIn terms of consequences, our results indicate that tax changes have very large effects on output.
Our baseline specification suggests that an exogenous tax increase of one percent of GDP lowers real
GDP by roughly three percent. Our many robustness checks for the most part point to a slightly smaller
decline, but one that is still well over two percent. The output effects are highly persistent. The behavior
of inflation and unemployment suggests that this persistence reflects long-lasting departures of output
from its flexible-price level, not large effects of tax changes on the flexible-price level of output. We also
find that the output effects of tax changes are much more closely tied to the actual changes in taxes than
to news about future changes, and that investment falls sharply in response to exogenous tax increases.
Indeed, the strong response of investment helps to explain why the output consequences of tax changes
are so large.
If you want to parse it more, the entire conclusion does break down the taxes in a manner of forms, then she makes the above statement. I bolded the sentence directly relating to my position.
I agree, there is lots of room to reign in spending. But we also have to realize the spending has happened due to a lack of check on entitlements (yes, there has been some added, quite a few, yet they have had limited results). We say we are going to run out of SS, but yet, we never say that about welfare. Defense spending as a percentage of the budget, in fact all discretionary spending (defense, everything else) has stayed a relatively the same for decades. The increase has been in the entitlements. SS, Welfare, Medicare/Medicaid have gone up, way beyond the original plans. SS was supposed to ramp up the age you receive it in relation to the average life expectancy. That didn't happen. Welfare has grown beyond the originally planned limits. Medicaid/medicare are now 25% of the budget, far above what was expected even in 2013. Entitlement reform would be the big area to reign in spending, yet Trump is finding triffle little BS here and there to make a big deal out of. He might be picking on PBS and the like, but that is nothing compared to finding a way to reduce HC costs, even by a fraction of a percent. If we could reduce the increase in HC, Welfare or sort out SS costs then the budget could right itself in a decade or so. The
The only problem with that is we would get in another president, so there is no reason to look at long term solutions. Raising taxes and spending result in short term "I did this while I was president" stuff, but the effect for the next 20 to 50 years results in 'kick the can down the road' types of management. Small fixes to make it decent now, while not making any significant change to programs that are eating up the budget.
For him? No idea, haven't asked.How'd that work out for Bush II?
How did that work for us? It was stupid. Really stupid in my opinion. Big spending, huge addition to the debt, higher tax requirements. Oh yeah, the economy bubbled and crashed also.
If he had gone the course with spending at the Next/Clinton rate and levels, we should have had a budget still lower than current, with more room to take on the expanding medicare/medicaid increases.
In the end, each dollar still has to be paid. Nuance be damned, or any other weasel words to squirm out of it, it is coming out of your paycheck and mine. At the tune of 20% of the budget in the future. That can not be changed by the context of the debt, or the details of it. It is a debt, it is mostly debt to China, and it will collect interest.And no, as with most things context, nuance, and details matter.
To believe otherwise is dogmatic.
$10T of debt is still 10 times as bad as $1T of debt. Saying otherwise is actually dogmatic.
We will still have to pay the piper. That number is $20T right now. If you want nuance, Trump would be adding 5% to $20T, whereas Bush added 25% to the current debt, and Obama added 50% of it.As of September 2014, foreigners owned $6.06 trillion of U.S. debt, or approximately 47% of the debt held by the public of $12.8 trillion and 34% of the total debt of $17.8 trillion. The largest holders were China, Japan, Belgium, the Caribbean banking centers, and oil exporters.
But that really is just a factor of spending. Spending is the beast that needs to be fed - taxes and debt are what feeds it, and how well you are feeding it.
NOW getting all wound up about debt, and talking dogma, well the context could only be that Trump is President, and it is bad, but it was Okay during Obama, and bad during GWB.
Where as the non dogmatic line would be it was bad under Bush, and Obama, and Trump.
Oh hell no. It was horrible in 1980. Stagflation, 18-20% interest rates? Yeah, it was a mess. I remember it. This is a (very slowly initially) recovering economy, climbing out of a 8 year stagflation. But the interest rates are low, and taxes in general are lower than it was.I see no evidence adequate returns are coming, and you can Google any number of Reagan's former advisors who are saying as much. The economy is not in remotely the same position it was in 1980.
Well, it has been in effect for all of a month. Time will tell, but history has been very clear. It has resulted in an increase in revenue over the long run. With the next quarter the economy is expected to rise by 5.4%. http://www.businessinsider.com/atlan...h-in-q1-2018-2
I can only look at the history on this, and reducing taxes just help the economy. I suspect this one will also.
But hey, Milton Friedman had a bit to say on this. And like I said - the problem is spending, in the end.
But to be clear: The biggest problem was the budget increase under GWB. It was the highest increase in government spending we have had since the 1965 social program work. Obama increased spending on that, but not as bad as GWB.
Now, I will work on a decent reply for Irony.