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Thread: OT: Politics

  1. #551
    Insider Unfated33's Avatar
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    It's always interesting to see how steadfastly some people will hold to the accuracy of the Laffer curve, while equally and adamantly insisting that we are not in the part of the Laffer curve where increased tax revenue would lead to increased growth.

  2. #552
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    Doc: The paper does indeed say exactly that. In fact, from her paper it says, in the conclusion:

    In 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.
    Original working paper is here, conclusion is on page 44 of the PDF: https://eml.berkeley.edu/~dromer/pap...ERJune2010.pdf

    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.

    How'd that work out for Bush II?
    For him? No idea, haven't asked.

    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.

    And no, as with most things context, nuance, and details matter.

    To believe otherwise is dogmatic.
    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.

    $10T of debt is still 10 times as bad as $1T of debt. Saying otherwise is actually dogmatic.

    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.
    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.

    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.

    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.
    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.

    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.
    Last edited by pbjosh; 02-06-2018 at 11:14 AM.
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  3. #553
    Josh - There was nothing Obama could of done to reduce the deficit. The economy was in terrible shape causing tax revenue to be way down, causing debt spending to increase to meet current commitments. End of story. Are you suggesting slashing spending when the market is contracting or not simply not infusing the economy with cash to make up for the contraction? The IMF recently rejected that approach which was gospel to them for years.

  4. #554
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    never, in the history of ANY country, has a tax cut, increased revenues.
    Hence, the reason I included the link to the heritage paper that shows exactly that. In the three large tax cuts, (1920's, the JFK and Reagan) there was.

    You have no supporting evidence for your claims, where as I do. It is just your opinion vs data from the Congressional Budget Office that shows otherwise.

    You really are no good at discussions like this Gordon. You use absolutes and don't backup your claims with data, and in fact make them in strong contrast to the data.
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  5. #555
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    Josh - There was nothing Obama could of done to reduce the deficit.
    I strongly disagree. There are lots of things. BUT: It wasn't anything GWB had done either. Spending is the end all of the budget, whether there is a deficit or otherwise. And he started with a high budget and added complexity to the government. He did not reduce spending, nor regulation. He could have done those things, and decided to not make that tough call, kicking the can. Much as GWB did the ARRA and kicked the can to him.

    If you reduce spending, the reduce the deficit. Just like at home. The problem is spending.

    But if you look at other nations most had no benefit from the stimulus, and those that had lower taxation (and smaller government) recovered faster. Those who took an austerity route recovered faster. Those who reduced taxation recovered faster.

    In the middle of it, Obama passed a large piece of legislation that increased the cost to many small business owners, and incurred a new tax on people who didn't buy insurance. And added thousands of pages to regulations and tax documentation.

    And he propped up banks that should have failed, instead of wasting that money. He also penalized companies doing business in the US, buy increasing the tax on them if they did business in nations that cost less than the US.

    So, I disagree. And the results from other nations hold up that position.
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  6. #556
    What nations are you referring too?

  7. #557
    Quote Originally Posted by pbjosh View Post
    Hence, the reason I included the link to the heritage paper that shows exactly that. In the three large tax cuts, (1920's, the JFK and Reagan) there was.

    You have no supporting evidence for your claims, where as I do. It is just your opinion vs data from the Congressional Budget Office that shows otherwise.

    You really are no good at discussions like this Gordon. You use absolutes and don't backup your claims with data, and in fact make them in strong contrast to the data.
    none of which actually increased revenues.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

  8. #558
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    Gordon's entire position is basically here:

    https://en.wikipedia.org/wiki/Laffer...Empirical_data

    Note that the 2005 CBO study (conducted under GWB) undermines Josh's point.

    https://www.cbo.gov/publication/17507?index=6908

    Further note that all taxes aren't created equal. Corporate taxes, by all means, let's lower them. For low income earners, yes, by all means, let's lower those too - people who spend every dollar they make are nearly guaranteed to increase the overall monetary velocity of an economy. Personal income rates should be high, in my opinion. It's only because so many small business owners (myself included) use pass-through taxation structures for ease of bookkeeping that this is even a somewhat reasonable argument. Simplifying corporate regulations while raising taxes for high wages earners would be a great start towards a balanced tax plan, IMO (for the record, this is against my own interest since my wife outearns me).

    Jobs are created by companies needing to fill (newly created) demand. Jobs aren't created by allowing the wealthy to keep higher profits.
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  9. #559
    josh's data doesn't support his conclusion?

    say it an't so!

    56 pages does prove one point. josh's data doesn't support his conclusion.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

  10. #560
    Quote Originally Posted by Lurker27 View Post
    Jobs are created by companies needing to fill (newly created) demand. Jobs aren't created by allowing the wealthy to keep higher profits.
    this is true as long as we remain in a demand starved economy. any way to create demand will improve the economy, and employment, and ironically, help the rich get richer too.

    we will remain in a demand starved economy forever, as long as the corporatists are in charge. this is a comment on both republicans and democrats. FDR is probably the last president who wasn't a corpporatist.
    Last edited by cockerpunk; 02-06-2018 at 02:48 PM.
    social conservatism: the mortal fear that someone, somewhere, might be having fun.

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