The ultimate vindication of Republican supply-side economics

[itfitzme]

No, just you. Heritage got one fact wrong once in one article out of the hundreds they produce a year and suddenly nothing they write is correct. And that's assuming you are even correct on the one fact.
That makes you an idiot.

They didn't get one fact wrong, they bullshitted the entire thing.

I did the work, I put the data up on a graph. I lined up the tax cuts and increases. So, show the correlation. All I did was try to prove what you said.

I'm not here to make you feel good by agreeing with you. Is that what you looking for, someone to jerk you off?

Don't assume I got the facts right, prove it. Because when you "assume".... (too easy). No really, prove it. I didn't put it there for you, I put it there for me, so that I know that I have it in front of me and I have to see it. That is how I make sure I'm right, I put it out there.

Seeing as I put it out there, don't assume anything, prove it. You said it "assuming you are even correct on the one fact". You won't though. Because what your really doing is mental masturbation. Oh, it feels so good....Look at me, I made a funny picture. Look at me, I'm sure telling those "liberals". jerk jerk jerk....

One article out of a hundred? How do you know that? Have you gone through and verified the accuracy of every one of their articles? No, you haven't, your bullshitting.

What are the odds that I would happen to find the "one in a hundred"? I'm suppose to verify every one? That's my point, it's easier to just bypass them. They are either dependable or they are not. The problem is, they don't link. They make the claims then leave no traceability. It is up to the reader, if they aren't willing to swallow it hook line and sinker, to research it independently. That is not how it works. The responsibility of proof is on the writer, not the reader.

They present themselves as experts. They don't get afforded the excuse of "oops, we made a mistake".

"Oops" is for children. We give children a break. Teenagers get a break. And it's not a hobby. You get to make a mistake when your doing it as a hobby.

It's not rocket science. But it isn't baking a cake either.

Have you worked in manufacturing? Manufacturing of medical equipment? You know what six sigma is? Do you know the level of quality in verification that six sigma means? It's one in a million, not one in a hundred, not one in a thousand.

What if you're doctor "made a mistake"? Your pharmacist? How about the Federal Reserve? Your brain surgeon? What about your auto mechanic? Ever had a wheel fall off your car on the freeway? Would you go back to that mechanic? Of course not. You expect them to pay for the damage, then you would find another mechanic.

The Heritage Foundation does it for a living. They get paid to do it. They are funded. They present themselves as knowing what they are doing. They don't make mistakes.

What world do you live in where you think adult professionals make mistakes?

Fox has a 10% error rate, because that's what their viewers want to hear. NPR is off 2% of the time. People depend on expert knowledge, Fox and NPR don't get to "oops, we made a mistake but we didn't notice so, oh well." That's just fine if their viewers want to pay them for making mistakes. But I don't, so I don't use Fox, NPR, or the Heritage Foundation as a reference because they make "mistakes". "Yeah, judge, it was a mistake. Oops, I didn't mean to run over that kid. It was a mistake."

What is the difference between the BEA, BLS, and the Heritage Foundation? The BEA and BLS publish everything they can. They publish their methods. They publish their data. Every methodology has been carefully studied and peer reviewed. They publish press releases when they find an error.

Wikipedia is a hobby for the writers. Every link is verifiable. They hash and rehash it. They go over every comment. Crap, Wikipedia has fewer errors then the published encyclopedias.

The Heritage Foundation peer reviews nothing. None of it is accepted practice. They don't link. They hide their mistakes. They do it on purpose. They are not stupid. And if they are, they shouldn't be doing it.

Why should anyone give the Heritage Foundation, and you for that matter, a break of "making a mistake"? As I've seen, your the first one to revert to saying "Liberal", "Moron". I've read your comments. You don't "give people a break" when they don't agree with you. Apparently, you can dish it out but you can't take it.

If the Heritage Foundation doesn't know, they don't know. But they don't get to present "dynamic analysis", claiming that the debt will be paid off in 2010 and then, "Oh well, we made a mistake". It is unadulterated guessing passed of as expertise. It's not like they are under some time pressure to get an article out by the evening. I don't have time to fact check every one of there articles.

After a while, it becomes clear who is finding what they want to see and who is seeing what they find. It becomes clear who is making statements without presenting anything verifiable because they are hiding their mistakes. The difference is that when people hide their mistakes from others, you can bet they are in the habit of hiding them from themselves. After a while, they start to believe their own bs.

It becomes clear who falls to ad hominum attacks, like "liberal", "Nazi", etc. When your information is weak, you don't put it out there, instead, you make some unqualified statement as fact then when someone doesn't agree, you fall to name calling.

Grow up dude. Stop wining about "Oh, you don't believe me so your a moron...." Clown hair on Obama? What, are you in Jr. High? "Oh look how clever I am." I'm so clever..."yo, mama is so fat...."

I've read the comments and the "vindication of supply side" has been hammered at every turn. Oh, Bush Tax cuts don't work, try Ireland, try China, try Clinton. "You say they don't, well prove that tax cuts increase GDP." It was right or wrong at the start.

Like someone said, it's just not that simple. So far, it don't matter much.

Yeah, I'm a moron. At least I back it up. Your either too lazy to even try or you just expect others to swallow it so you can feel so smart. Oh thank you for gracing us all with your presence and magnificence. What would we ever do, us uneducated bozos? And to think some people wasted all the education on an economics degree and taking a course in econometric. Why, they could have just asked you.

Why should anyone believe you? BECAUSE YOU TYPE IN CAPITAL LETTERS AND CALL PEOPLE LIBERALS WHEN THEY DON'T BUY YOUR BS?

No, really, what good are you? Someone that can Photoshop?

Oh, I get it. When you do it, you have a good reason. When someone else does it, it hurt's your feelings.

See, the problem your having is that the sword cuts both ways. You just don't like that your held to the same standards that you expect of everyone else. Your right, but they are liberals. Your right, but they don't get it.

But you won't get it.

 

[Foxfyre]

I'm sorry, but I will not accept Wikipedia as a reliable rebuttal for the Heritage Foundation. Or an unsupported opinion that you don't like the Heritage Foundation. Most liberals don't. But I haven't found anybody who has successfully challenged the hard facts they print. Their more subjective opinions are as debatable as anybody else's, but in this case the fact is that Clinton and his democratically controlled Congress did push through a substantial tax increase in 1993. Itfitzme specifically stated that he did not raise taxes and we showed that he did. He also signed the reduction in taxes pushed through by the GOP after they took power in the 2004 election.

 

[stans]

No, idiot. We had the boom. And then Clinton raised taxes. The recession of 2001 was the result.
Get it right.
You can't answer a question. Hell, you can't ask a question. You can't read and you can't respond. What fucking good are you?

No he didn't. You are either a liar, you have been duped, or your convinced they must have because it "explains things".

Where do you get your information because it is clearly wrong. You don't look things up before you make a statement. I have to look up everything. You are always wrong. What fucking good are you?

Individual income taxes remained the same.

Effective capital gains taxes went up by 1.8% from 1993 to 1996 then were lowered by 7.4 % through 2001.

Max Capital gains taxes were lowered by 8% in 1998. Corporate top marginal rate

Here is the data. Didn't have time for a graph.

And, Clinton paid down the debt and deficit. The "recession" of 2000 was not a two consecutive quarter recession, but was two seperate quarters with one increasing GDP in between. As recessions go, it was meaningless.


Year LegYear President

1993 1994 Bill Clinton
1994 1995 Bill Clinton
1995 1996 Bill Clinton
1996 1997 Bill Clinton
1997 1998 Bill Clinton
1998 1999 Bill Clinton
1999 2000 Bill Clinton
2000 2001 Bill Clinton



income Taxes All Clinton Years

Marginal
Tax Rate
15.0%
28.0%
31.0%
36.0%
39.6%

Capital Gains Taxes have fallen since 1996
Year Eff Max
1993 23.7 29.19
1994 23.7 29.19
1995 24.6 29.19
1996 25.5 29.19
1997 21.7 29.19
1998 19.6 21.19
1999 20.2 21.19
2000 19.8 21.19
2001 18.18 21.17


Corporate Rates Top Marginal Rate

1993 39.6
1994 39.6
1995 39.6
1996 39.6
1997 39.6
1998 39.6
1999 39.6
2000 39.6
2001 38.6

Yes, unless one is certain of what he or she is talking about, it is good to look things up begfore making grand pronouncements:

In 1993, President Clinton ushered through Congress a large package of tax increases, which included the following:[2]

An increase in the individual income tax rate to 36 percent and a 10 percent surcharge for the highest earners, thereby effectively creating a top rate of 39.6 percent.

Repeal of the income cap on Medicare taxes. This provision made the 2.9 percent
Medicare payroll tax apply to all wage income. Like the Social Security payroll tax base today, the Medicare tax base was capped at a certain level of wage income prior to 1993.

A 4.3 cent per gallon increase in transportation fuel taxes.

An increase in the taxable portion of Social Security benefits.

A permanent extension of the phase-out of personal exemptions and the phase-down of the deduction for itemized expenses.
Tax Cuts, Not the Clinton Tax Hike, Produced the 1990s Boom

It was the following tax cuts, however, not the tax hikes, that produced the Clinton years economic boom. There is an excellent analysis for the rationale for that and the net effects at the link provided.

How about it was the coming of age of the personal computer, advances in telecomminications, and start of the web that made workers much, much more efficient so companies could get much more work done without hiring more workers. This is much more powerful economically than any tax cut.

 

[stans]

Simple, Reagan was the beginning of much of today's debt problems.

actually Republicans have introduced 30 Balanced Budget Amendments since Jefferson. Liberals killed everyone one of them.

A child should know this.

When you pass a balnced budget amendment, I assume that you allow for contingencies such as a major war, where you must have deficit spending to pay for the military to ensure the continued existance of the US. But what happens if you don't forsee a given contingency, when the amendment is written, that will destroy the US if money is not spent to defend against it, forcing deficit spending? Do you put a provision in the amendment stating that deficit spending is allowed if some event will destroy the US? So, who decides beforehand when the potentially fatal event is starting to occur, that the event is in fact fatal, and that we should start borrowing? Maybe, you should be the decider, Edward.

 

[stans]

You haven't shown that Ireland's boom did not occur because they changed tax rates.

That's because I didn't assert it. But based on that logic (i.e. that lowering or raising taxes alone, causes "booms"), raising taxes in America would cause the biggest possible boom.
As would converting to a Theocratic Monarchy! Because Saudi Arabia is RICH baby!

My assertation was this: It's not that simple. The fact that the lower tax rates has nothing more for Ireland in the last three years, than countries with higher tax rates, would support this.
There are multiple factors that effect a national economy.

There is no secret, most corporations who moved there will tell you they moved there because of the lower tax, primarily. Only a liberal can't understand the obvious. What does that say about liberalism?

Any references to back this up? How about most corporations go offshore to the lowest wage paying country that they can find that has labor sufficiently skilled or trainable to meet the corporations needs needs.

 

[stans]

One of the reasons that we had the recent collapse was because investment banks and other financial institutions were leveraging up to and over 40 to1.

You assume that a genius liberal regulator knows what the correct leverage ratio is and all he has to do is impose it. Imagine if you guess wrong and the economy grows at half the speed it should have or too high and everyone goes to the correct liberal level and everyone then collapses at the same time because it was too high.

The most constructive role the government could play is to require each bank to print its leverage ration on all transactions so the free market could decide what was correct for each bank. Those who wanted to speculate could and those who wanted safety could have it.

The bank reserve requirement (leverage ratio) was set by the Fed for decades at 5%, (20:1) and a bit higher (%) earlier without a finacial collapse. So we have a safe ratio history since the guessing has already been done over the years by the Fed. No one, as far as I know, knows the limits of a safe ratio. Financial instituions worked it higher over time and just like a stock market crash few can forsee when a collapse is coming. Better to have the Fed set the ratio around the known safe 5% and not allow unsafe speculation which may result in financial collapse. I assumed nothing. I stated an abbreviated history. Read the posting a bit more carefully before you criticize it.

 

[The Rabbi]

I'm sorry, but I will not accept Wikipedia as a reliable rebuttal for the Heritage Foundation. Or an unsupported opinion that you don't like the Heritage Foundation. Most liberals don't. But I haven't found anybody who has successfully challenged the hard facts they print. Their more subjective opinions are as debatable as anybody else's, but in this case the fact is that Clinton and his democratically controlled Congress did push through a substantial tax increase in 1993. Itfitzme specifically stated that he did not raise taxes and we showed that he did. He also signed the reduction in taxes pushed through by the GOP after they took power in the 2004 election.

The NYTimes makes mistakes, which is why they publish retractions.
But I doubt Heritage made a mistake here. I'd be more likely to bet Stans doesn't know wtf he's doing.

 

[stans]

I'm sorry, but I will not accept Wikipedia as a reliable rebuttal for the Heritage Foundation. Or an unsupported opinion that you don't like the Heritage Foundation. Most liberals don't. But I haven't found anybody who has successfully challenged the hard facts they print. Their more subjective opinions are as debatable as anybody else's, but in this case the fact is that Clinton and his democratically controlled Congress did push through a substantial tax increase in 1993. Itfitzme specifically stated that he did not raise taxes and we showed that he did. He also signed the reduction in taxes pushed through by the GOP after they took power in the 2004 election.

The NYTimes makes mistakes, which is why they publish retractions.
But I doubt Heritage made a mistake here. I'd be more likely to bet Stans doesn't know wtf he's doing.

That's the extent of your intellect, guessing. Keep going and make a bigger fool of yourself than you have already. I wish I could say that I set a trap for you, but you demonstrated your stupidity on your own. Anyone want a good laugh, see posts #61 and 76 of this thread including quotes

 

[Foxfyre]

I'm sorry, but I will not accept Wikipedia as a reliable rebuttal for the Heritage Foundation. Or an unsupported opinion that you don't like the Heritage Foundation. Most liberals don't. But I haven't found anybody who has successfully challenged the hard facts they print. Their more subjective opinions are as debatable as anybody else's, but in this case the fact is that Clinton and his democratically controlled Congress did push through a substantial tax increase in 1993. Itfitzme specifically stated that he did not raise taxes and we showed that he did. He also signed the reduction in taxes pushed through by the GOP after they took power in the 2004 election.

The NYTimes makes mistakes, which is why they publish retractions.
But I doubt Heritage made a mistake here. I'd be more likely to bet Stans doesn't know wtf he's doing.

Yes, if the Heritage Foundation publishes something that is later amended or found to be in error, they post a very large, prominent correction. In this case, there are any number of souces that would verify the 1993 tax hikes as well as the Republican reforms that occurred after the 1994 GOP takeover of the House and Senate--a takeover made possible mostly because of those tax hikes coupled with Hillarycare that even the Democrats couldn't stomach coupled with a very attractive list of reforms in the Contract with America that the people were hungry for.

There were about 30 fiscally conservative Democrats, led by Tim Penny of Minnesota, who joined with the Republicans to push reforms and supply sided principles that created the impressive Clinton economy and saved his prresidency in spite of himself. He vetoed welfare reform I think three times before public opinion finally persuaded him to pass it. And that was a big part of all that. There is nothing supply sided in the nanny state.

But the fact is, the right kind of tax cuts CAN boost the economy. The wrong kind of tax increases can slow or stall it.

 

[itfitzme]

I will not accept Wikipedia as a reliable rebuttal

The Wikipedia quote isn't a rebuttal. It substantiates the Heritage Foundation information. In fact, it is exactly the same words. How stupid are you? Your not reading things. You too busy trying to win something. Your living in the Us vs Them (liberals) fantasy land.

Try keeping up with the data.

 

[stans]

I'm sorry, but I will not accept Wikipedia as a reliable rebuttal for the Heritage Foundation. Or an unsupported opinion that you don't like the Heritage Foundation. Most liberals don't. But I haven't found anybody who has successfully challenged the hard facts they print. Their more subjective opinions are as debatable as anybody else's, but in this case the fact is that Clinton and his democratically controlled Congress did push through a substantial tax increase in 1993. Itfitzme specifically stated that he did not raise taxes and we showed that he did. He also signed the reduction in taxes pushed through by the GOP after they took power in the 2004 election.

The NYTimes makes mistakes, which is why they publish retractions.
But I doubt Heritage made a mistake here. I'd be more likely to bet Stans doesn't know wtf he's doing.

Yes, if the Heritage Foundation publishes something that is later amended or found to be in error, they post a very large, prominent correction. In this case, there are any number of souces that would verify the 1993 tax hikes as well as the Republican reforms that occurred after the 1994 GOP takeover of the House and Senate--a takeover made possible mostly because of those tax hikes coupled with Hillarycare that even the Democrats couldn't stomach coupled with a very attractive list of reforms in the Contract with America that the people were hungry for.

There were about 30 fiscally conservative Democrats, led by Tim Penny of Minnesota, who joined with the Republicans to push reforms and supply sided principles that created the impressive Clinton economy and saved his prresidency in spite of himself. He vetoed welfare reform I think three times before public opinion finally persuaded him to pass it. And that was a big part of all that. There is nothing supply sided in the nanny state.

But the fact is, the right kind of tax cuts CAN boost the economy. The wrong kind of tax increases can slow or stall it.

What's the wrong kind of tax increase?
If you want to use unemployment rate as a measure of the economy, I recently found this. Since 1944, there's been 11 different years in which the threshold for the maximum rate for personal (joint, married) has been decreased. (Personal taxes are the largest source of government tax income.) Unemployment rate reduction 1 and 2 years after the tax cut averaged 0.09% and 0.78% respectively which coincidently is approximately what everyone is complaining bitterly about now. The unemployment rate decreased for both delays in 9 of the 11 years and actually increased for both delays in 2 of the years. Taxes were increased in 5 or 6 different years and average unemployment rate increased just about the same amount as they decreased with tax reduction. So there appears to be a very weak relationship between tax rate change and unemployment rate change. But remember that the maximum tax rate went from 94% in 1944 to 35% in 2011, a massive overall decrease. If you want references, go read my online article. Also it contains the results for the 4 times that the maximum tax rate threshold was decreased over this period and it contains the std dev of the averaged unemployment rate changes.

 

[itfitzme]

But I doubt Heritage made a mistake here.

Your doubt doesn't do anyone any good. And it doesn't change the facts.

Back when the discussion was about the 2001 & 2003 Bush Tax cuts, it was discovered that their seminal work, on the effects of the 2001 tax cuts, was completely wrong. In this thread they because a useless source. And, they don't provide sufficient links to follow back to any source or references. At that point, they are no longer a useful reference because they have to be verified separately and independently. I had to take their claim, google it, open Wikipedia to find the fundamental references that traced back to the IRS and the 1993 law passed by Congress.

If they provided links, it would useful because it would be easy to follow through with checking things. And as a source of some ideas, they might be useful. If we wanted to come up with ideas for "dynamic analysis" then great. But were not looking for brainstorming ideas. We are looking for tax data and tax data is the IRS. If someone is nice enough to compile it into a table, excellent. The TaxFoundation.org does that. And they are reliable.

The exact same information was available from Wikipedia, word for word, a source that has every reference detailed. There is no point in using the Heritage Foundation as a source when the exact same information is available elsewhere. Wikipedia isn't a fundamental reference, I didn't use it for that actual tax data, I use the IRS and the Tax Foundation. I just used Wiki as a starting point for finding a description of the 1993 tax changes. I used the IRS for the actual data.

How many ways can I say the same thing.

Still this is an entirely different topic. The thread is "vindication of supply side economics". It isn't a discussion of research technique. The question is if their is evidence to show that changes in taxes causes changes to GDP.

There were about 30 fiscally conservative Democrats, .......persuaded him to pass it. And that was a big part of all that. There is nothing supply sided in the nanny state.

Blah blah blah blah blah....Who cares? It's your story about the good guys vs the bad guys and how the good guys won, blah blah blah.

How does that affect whether changes to taxes changes national output? It doesn't, it's some other topic and a story you use to feel good...blah blah blah..."nanny state". blah blah blah .."liberal".....blah blah blah...."Marxist"..... I don't f------g care!

We have what is called a mixed economy and a democratic-republic political structure. There is no "nanny state". There is the "Show me" State. It's meaningless in terms of whether tax changes affect GDP.

But the fact is, the right kind of tax cuts CAN boost the economy. The wrong kind of tax increases can slow or stall it.

Finally you get around to the original point. Oh, except now it's "the right kind of tax cuts." So where are the facts?

Your so busy having this imaginary fight with the "liberals" that you can't stay on point and never provide any facts. You go from "The fact is....." then off to some fantasy about the good guys vs the bad guys. Of course your on the side of the good guys. "Liberals" are the bad guys. You know what, most people don't care. No one cares about your fantasy fight between good guys and bad guys. Go join a fantasy football group.

If tax increases boost the GDP, great. If tax decreases boost GDP, great. If one kind works and another does the opposite great. Just fucking prove it.

And here is all the data, including the 1993 Clinton tax increase, the 1996 Clinton tax decreases, and the Bush tax cuts of 2001, 2003.

I've done all the god damn work for you, downloaded GDP and unemployment. I lined them up in Excel along with marking the all tax changes that were brought up. So where is the effect of tax changes to GDP and unemployment? All you have to do it point to it.

http://i776.photobucket.com/albums/yy42/thefitz3/UnGDP3.gif.

 

[The Rabbi]

But I doubt Heritage made a mistake here.

Your doubt doesn't do anyone any good. And it doesn't change the facts.

Back when the discussion was about the 2001 & 2003 Bush Tax cuts, it was discovered that their seminal work, on the effects of the 2001 tax cuts, was completely wrong. In this thread they because a useless source. .

Would someone translate this statement into English for me? I don't speak Moron.

Heritage was not wrong. You were wrong.

 

[itfitzme]

...I'd be more likely to bet Stans doesn't know wtf he's doing.

Clearly he knows what he is doing. He commits himself to dates and numbers. If he is wrong, he and anyone else can determine exactly how and where. He knows exactly what he has done and is doing. You don't know what he is doing.

Yeah, for all you know, I'm wrong, he's wrong, Wikipedia is wrong, the IRS is wrong. For all you know, anything might be right or wrong.

But the fact is, the right kind of tax cuts CAN boost the economy. The wrong kind of tax increases can slow or stall it.

And there is the million dollar question. What kind at what point in the business cycle?

This thread began with the OP of Ireland corporate tax rates vindicating supply side econ. Then it was some French guy complaining about them that vindicated it. Then it was China implementing "freedom". Then it was the Bush Tax cuts. Then it was Clinton era tax changes. Now it includes, "the wrong kind of tax increases...".

That, of course, is not vindication of supply side economics. That is a statement that it is more complicated.

All sorts of hypothesis can be created. Without demonstrating what kind, how much, when, and what specific effect, it's meaningless. All I see in the thread are vague hypothesis set forth as facts with nothing to back them up. Presented with the data, that put facts to the hypothesis, it is followed by a dodge to some story about how "Republicans saved the Clinton presidency." It doesn't matter why they were implemented. They were or were not; the RGDP went up or down; unemployment went up or down.

You say what kind of data and I'll happily line it up.

If you want references, go read my online article.

I missed the link. Would you be so kind as to post it again?

What's the wrong kind of tax increase? If you want to use unemployment rate as a measure of the economy, I recently found this.

I found an article by Krugman where he used the employment-population ratio.

Bush tax cut mythology - NYTimes.com

Is this a better measure?

Since 1944, there's been 11 different years ... it contains the std dev of the averaged unemployment rate changes.

You referred to the standard deviation. Your going to confuse them with those complicated statistics things. And everyone knows that mathematical statistical techniques were created by those "liberal socialist Nazi communists". Next thing, you will be using "confidence limits".

The thing that conflagrates it is that the economy is a feedback system and the government is a huge part of that feedback. "Hypothetically", a tax cut should include a reduction in spending. So both have to be taken into account. Thankfully for our analysis, the gov't doesn't connect tax revenue to spending very well.

Then there is a problem of what point in the business cycle it is happening. At full output, no manner of changes are going to increase output. Same with employment.

Then there is the hypothesis that a change in spending or taxes causes an impulse in GDP or employment. It is temporary. It should be obvious that an increase in aggregate income will be followed by an increase in prices if output is already at it's max.

This was Hume's observation. An increase in the money supply causes an increase in output first. Then after some time, price increases follow.

And typically what we see is the gov't implementing both supply and demand side policies simultaneously.

How long does it take for the information to go around the loop and settle? Feedback systems oscillate about the new equilibrium point. There are under-damped, over-damped, and critically-damped systems. The economy is likely not stable in terms of being any particular kind, but changes with changing condition.

It is quite possible for there to be an initial increase followed by a later decrease to a lower level. This creates some problem if all the conclusion follows from the initial increase then makes an unsubstantiated conclusion that the latter decrease must be for some other reason. That seems to be the way the general reasoning goes. The Bush tax cuts "saved us from a recession", concluded from the 2001 events while ignoring the fact that the 2003 cuts were followed by a continuous decline. That is a psychological effect. 9/11 scared people and Bush did something. The real effect on GDP, due to confidence, can be temporary.

A nice example of a psychological effect is the downgrading of the gov't credit rating. Take the DJI and plot the rate of change on a daily basis. There is a clear increase in the variance that dampens with time.

And there have been periods of increasing RGDP with increasing unemployment.

During the Dec 2007 recession, when unemployment was rising, efficiency went up as well. RGPD per working person increased. And why not? People put in extra hours simply to help their company survive.

It is, unfortunately, not so simple as "Tax increases cause increased RGDP"

It will be nice to read your article, if you would be so kind as to post that link again for me.

 

[itfitzme]

Your doubt doesn't do anyone any good. And it doesn't change the facts.

Back when the discussion was about the 2001 & 2003 Bush Tax cuts, it was discovered that their seminal work, on the effects of the 2001 tax cuts, was completely wrong. In this thread they [became] a useless source. .

Would someone translate this statement into English for me? I don't speak Moron.

Heritage was not wrong. You were wrong.

Feigned ignorance always works. Still, it's not the point of the thread. The point is "vindication of supply side economics."

All the info is in the thread. That's the great thing about the internet, it takes notes for us. You don't know what I am talking about, go back and read the thread.

Okay, you win, I am a liberal socialist Marxist Nazi Moron that is wrong.

It has nothing to do with GDP, unemployment and tax changes. The GDP doesn't care if I am wrong or right. You and I could die and the economy would just keep on going without us.

Here is the graph again, with all the tax cuts that have been presented.

And the last idea presented what it is that the right tax cuts increase GDP and the wrong tax cuts decrease it.

http://i776.photobucket.com/albums/yy42/thefitz3/UnGDP3.gif

I don't see it. But then, I'm a moron. If I was so smart, I wouldn't be on the internet, at 3:30 in the afternoon on a work day, having this conversation with you. I can live with that.

Thankfully we have you to lead the way. I've been begging you to point to it. I'm the tech, my skills only go so far as to be able to find, download, arrange, and graph data. You're the brains. Point to it. Everyone is waiting.

 

[The Rabbi]

Your "graph" is a meaningless jumble of crap. Lying through diagrams is still lying.

I agree that not all tax cuts are equal, however.

 

[itfitzme]

Your "graph" is a meaningless jumble of crap. Lying through diagrams is still lying.

I agree that not all tax cuts are equal, however.

Dude, it is just a graph of the % chg in GDP and unemployment as published by the BEA and BLS. The dates of the changes to the tax rates are marked for reference.

You have said everything that anyone needs to know.

 

[stans]

...I'd be more likely to bet Stans doesn't know wtf he's doing.

Clearly he knows what he is doing. He commits himself to dates and numbers. If he is wrong, he and anyone else can determine exactly how and where. He knows exactly what he has done and is doing. You don't know what he is doing.

Yeah, for all you know, I'm wrong, he's wrong, Wikipedia is wrong, the IRS is wrong. For all you know, anything might be right or wrong.

But the fact is, the right kind of tax cuts CAN boost the economy. The wrong kind of tax increases can slow or stall it.

And there is the million dollar question. What kind at what point in the business cycle?

This thread began with the OP of Ireland corporate tax rates vindicating supply side econ. Then it was some French guy complaining about them that vindicated it. Then it was China implementing "freedom". Then it was the Bush Tax cuts. Then it was Clinton era tax changes. Now it includes, "the wrong kind of tax increases...".

That, of course, is not vindication of supply side economics. That is a statement that it is more complicated.

All sorts of hypothesis can be created. Without demonstrating what kind, how much, when, and what specific effect, it's meaningless. All I see in the thread are vague hypothesis set forth as facts with nothing to back them up. Presented with the data, that put facts to the hypothesis, it is followed by a dodge to some story about how "Republicans saved the Clinton presidency." It doesn't matter why they were implemented. They were or were not; the RGDP went up or down; unemployment went up or down.

You say what kind of data and I'll happily line it up.



I missed the link. Would you be so kind as to post it again?

What's the wrong kind of tax increase? If you want to use unemployment rate as a measure of the economy, I recently found this.

I found an article by Krugman where he used the employment-population ratio.

Bush tax cut mythology - NYTimes.com

Is this a better measure?

Since 1944, there's been 11 different years ... it contains the std dev of the averaged unemployment rate changes.

You referred to the standard deviation. Your going to confuse them with those complicated statistics things. And everyone knows that mathematical statistical techniques were created by those "liberal socialist Nazi communists". Next thing, you will be using "confidence limits".

The thing that conflagrates it is that the economy is a feedback system and the government is a huge part of that feedback. "Hypothetically", a tax cut should include a reduction in spending. So both have to be taken into account. Thankfully for our analysis, the gov't doesn't connect tax revenue to spending very well.

Then there is a problem of what point in the business cycle it is happening. At full output, no manner of changes are going to increase output. Same with employment.

Then there is the hypothesis that a change in spending or taxes causes an impulse in GDP or employment. It is temporary. It should be obvious that an increase in aggregate income will be followed by an increase in prices if output is already at it's max.

This was Hume's observation. An increase in the money supply causes an increase in output first. Then after some time, price increases follow.

And typically what we see is the gov't implementing both supply and demand side policies simultaneously.

How long does it take for the information to go around the loop and settle? Feedback systems oscillate about the new equilibrium point. There are under-damped, over-damped, and critically-damped systems. The economy is likely not stable in terms of being any particular kind, but changes with changing condition.

It is quite possible for there to be an initial increase followed by a later decrease to a lower level. This creates some problem if all the conclusion follows from the initial increase then makes an unsubstantiated conclusion that the latter decrease must be for some other reason. That seems to be the way the general reasoning goes. The Bush tax cuts "saved us from a recession", concluded from the 2001 events while ignoring the fact that the 2003 cuts were followed by a continuous decline. That is a psychological effect. 9/11 scared people and Bush did something. The real effect on GDP, due to confidence, can be temporary.

A nice example of a psychological effect is the downgrading of the gov't credit rating. Take the DJI and plot the rate of change on a daily basis. There is a clear increase in the variance that dampens with time.

And there have been periods of increasing RGDP with increasing unemployment.

During the Dec 2007 recession, when unemployment was rising, efficiency went up as well. RGPD per working person increased. And why not? People put in extra hours simply to help their company survive.

It is, unfortunately, not so simple as "Tax increases cause increased RGDP"

It will be nice to read your article, if you would be so kind as to post that link again for me.

Thanks for your interest. Reduce Unemployment with Little Price Increase

 

[DSGE]

Thanks for your interest. Reduce Unemployment with Little Price Increase

Old Keynesian, huh. The problem with Old Keynesianism is that it's... well, old. Being an Old Keynesian is about as silly as being Austrian school, in that those old theories don't contain the 75 years of economic knowledge accumulated since then. On the other hand, congratulations on recognising that business cycles can be nominal. That's a vitally important step.

So the big Keynesian insight is that Say's law doesn't necessarily hold in the short run of a monetary economy. The result being that it's possible for demand to be "insufficient", and we get demand-side recessions and unemployment. Although not actually explicitly mentioned by Keynes in the General Theory, today we identify the cause of Say's law not holding being imperfectly flexible nominal wages and prices. A fall in nominal spending - be it because of a contraction of the money supply or an increase in the demand for money - means that nominal wages and prices must fall. But stickiness of those variables causes output to fall instead in the short run, until nominal variables fall to restore equilibrium. That's demand-side recessions in a nutshell.

Despite money being at the forefront of demand-side business cycles, Keynes didn't really pay much attention to monetary policy. The preferred way, he thought, to manage aggregate demand, if everybody was contracting their nominal spending, was to have the government be willing to expand its nominal spending. However, then Milton Friedman came along, published A Monetary History of the United States, and brought everybody's attention to how vitally important money is to business cycles. Everybody changed their mind. Famously, Paul Samuelson's textbook changes dramatically through editions starting from recommending fiscal stimulus for managing demand to the supremacy of monetary policy. There were other valuable insights as well, but I'm rambling now.

The point I started off intending to make is, we've identified demand side recessions as occurring due to a fall in nominal spending. Why bother with all this fiscal policy garbage? There's a plain and simple solution. An NGDP (nominal spending) level target for the central bank. If the Fed is forced to set and achieve a clear target path for nominal spending, demand-side recessions become non-existent. If for any reason there's a shock to nominal spending - that is, a shock to monetary velocity - the Fed would be forced to offset it by adjusting monetary policy to return nominal spending to target.

 

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If the Fed is forced to set and achieve a clear target path for nominal spending, demand-side recessions become non-existent. If for any reason there's a shock to nominal spending - that is, a shock to monetary velocity - the Fed would be forced to offset it by adjusting monetary policy to return nominal spending to target.

Isn't that one of the foundations of the Chartilism Keynesian school of macroeconomics?