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What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth.
What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth.
one might say that China recently switched to supply-side capitalist economics( less liberal government) and instantly ended centuries of liberal demand-side en masse starvation.
China I suppose makes the case even better than Ireland!
Clinton lowered spending because he had a reform minded Republican Congress for six of his eight years. To his credit, he was sometimes dragged into that kicking and screaming, but he finally signed the bills to accomplish it. (He vetoed welfare reform three times? before he finally signed it.)
It isn't really fair to compare Bush 43 GDP performance with Reagan, Bush 41, or Clinton as Reagan, Bush 41, and Clinton had nothing to contend with to compare with a 9/11, a Katrina, or the housing bubble burst. The Dot.com bubble burst was an economic calamity, but small scale compared to the three main events of the Bush 43 administration.
But if you look at Reagan, Bush 41, and Clinton, Reagan comes out looking the best hands down.
A good discussion and comparison here:
Bush-Clinton: What Went Wrong? | Stephen Moore | Cato Institute: Daily Commentary
Here is the receipts and outlays, per capita and worker, over time.
In current dollars goes up exponentially. The real dollars looks about the same, per capita and per worker just makes it a bit flatter.
How we get to Reagan was somehow the best hands down I cannot imagine. Even if we look at % chg, it's pretty much just average.
Really, the dot com burst and the recession of '07 aren't anything but Katrina, 9/11 and the wars are for Bush.
So we are ignoring the effects of technology bubble booms and busts, which is the underlying problem that has plagued the economy since before the Great Depression. Perhaps the housing bubble was small scale compared to Katrina as well.
Why Clinton decreased spending is meaningless. It happened or it didn't. The point of the thread is "vindication of supply side economics". And supply side economics doesn't care why it happened, just that it did.
This isn't the "Who was a better president" thread. Putting in terms of the presidency is convenient because we organize things that way. And we name tax changes after the presidential term. Regardless of the president, they either had an effect or they didn't.
Katrina, 9/11 and the wars were a tremendous burden to Bush's presidency but Obama inheriting a massive recession doesn't go towards his credit. If were going to make excuses, then it's a sword that cuts both ways. We either credit each with the crap or we hold each responsible for what they have to deal with. Each event gets measured in terms of it's impact, in dollars and lives, and is either factored in or is not. Frankly, I'd factor them in.
As far as I'm concerned, Bush and the Fed did a great job keeping the economy just smoothly rising upward in spite of an economy that was ready to collapse as early as the '05-'06 time frame. That was when the first indications of people dropping of their keys and declaring bankruptcy on medical bills first appeared. That is when there were the first indications of the business credit market tightening up. And Bush also drove the outlays per capita higher then any previous presidency. In-spite of things, he implemented attempts as demand side stimulus and the massive bank bailout. And it doesn't matter if he did it because he liked or inspite of hating it. He did.
The problem that we have, the underlying cause of the repeated recessions, is far more fundamental then just tax cuts or increases. Changes in interest rates, tax rates, deficit spending all keep bandaging some underlying imbalance. And it seems perfectly reasonable that the right tax cut, during periods of less than full output, may help medium and small businesses accumulate enough capital to invest in materials and capital equipment. Hopefully, out of 7 million businesses, enough of them will tap demand. It really ought to be there, at the very least in terms of a short burst before the economy balances out again. But in the final analysis, it's either measurable or it's not. And if it's not, it doesn't exist.
What is really intersting, if you follow that tragectory of gov't outlays, inspite of the reduction through the Clinton admin, it's right back to where the tragectory would have it. It just smells like there is something underlying that requires it go the way it's going. When it comes down to it, buyers, sellers, Congress and presidents end up doing what they have to do, not what they say they want to do. It's supply and demand.
9/11 was meaningless, American's don't roll over and die because of an attack on a couple of skyscrapers. If anything, they buckle down and work harder. I'd sure like to see some data to suggest it had an effect. As far as I can tell, American's aren't a bunch of pussies. Whatever networks got broken because of it were bypassed and repaired by the end of the week. We wouldn't expect any less.
Katrina, without some evidence one way or another, is meaningless. A disaster can just as well increase GDP. Refer to the broken window fallacy. GDP and unemployment didn't even blip on it.
And increasing military and military spending is about as Keynesian as we can get. The military is the biggest public works program ever devised by man. It has been that way since the beginning of history, when the economy goes to shit, countries went to war. Everyone is pretty much in agreement that WWII was one of the major factors that ended the Great Depression. War doesn't cause GDP to decline though it may increase it, I highly doubt that the two police actions were significant. It may reduce unemployment as it reduces the workforce. And there is an interesting change to the rate of change of unemployment shortly after Afganistan began.
But without some measure to put them into context of scale, there all just stories.
No, they aren't 'just stories'. You don't provide a source or a context for your graph, and without including all economic factors that come into play, your graph may or may or may not show the story as you interpret it. War invariably increases the GDP and economic uncertainty invariably decreases it. Both situations were present in the Bush 43 administration and of course 9/11, Katrina, and the housing crisis were all factors in that.
When I say that Clinton 'lowered spending', he in no way actually spent less. The reforms implemented in his term of office only slowed down the rate of spending so that the rate of growth could begin catching up with it. Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
The graphs shown in my link is given context that people--most especially the middle class--were prospering under the Reagan supply side economy, but the argument against 'supply side' now is that raising taxes puts money in the treasury and lowers the deficit while the "Bush tax cuts" created the deficits. An honest analysis shows that simply was not the case. The money was rolling into the treasury after the tax restructure--it always takes six months to a year for such policy to actually show up in the economy--but unfortunately, Congress was spending more than was coming in, the huge lion's share of that on the war effort.
Would there have been as vigorous growth without the wars and the bonanza that provides to the defense industry? That is yet another factor to include in the mix.
Taxes, high or low, do not create deficits. Spending more than the treasury takes in creates deficit all of which accumulate to make up the National Debt currently more than 15 trillion and growing at 3 billion dollars per day. And if anybody thinks that is not a drag on the economy, that person understands economics not at all.
Taxes however, are the primary source of revenue for the federal government. What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth. Leave that out of the equation and you really are spinning your wheels within the context of supply sided economics. As is trying to break it down into per capita GDP without considering ratios of children too young to work and retirees no longer in the workforce within population growth.
Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
Clinton lowered spending because he had a reform minded Republican Congress for six of his eight years. To his credit, he was sometimes dragged into that kicking and screaming, but he finally signed the bills to accomplish it. (He vetoed welfare reform three times? before he finally signed it.)
It isn't really fair to compare Bush 43 GDP performance with Reagan, Bush 41, or Clinton as Reagan, Bush 41, and Clinton had nothing to contend with to compare with a 9/11, a Katrina, or the housing bubble burst. The Dot.com bubble burst was an economic calamity, but small scale compared to the three main events of the Bush 43 administration.
But if you look at Reagan, Bush 41, and Clinton, Reagan comes out looking the best hands down.
A good discussion and comparison here:
Bush-Clinton: What Went Wrong? | Stephen Moore | Cato Institute: Daily Commentary
Here is the receipts and outlays, per capita and worker, over time.
No, they aren't 'just stories'. You don't provide a source or a context for your graph, and without including all economic factors that come into play, your graph may or may or may not show the story as you interpret it. War invariably increases the GDP and economic uncertainty invariably decreases it. Both situations were present in the Bush 43 administration and of course 9/11, Katrina, and the housing crisis were all factors in that.
When I say that Clinton 'lowered spending', he in no way actually spent less. The reforms implemented in his term of office only slowed down the rate of spending so that the rate of growth could begin catching up with it. Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
The graphs shown in my link is given context that people--most especially the middle class--were prospering under the Reagan supply side economy, but the argument against 'supply side' now is that raising taxes puts money in the treasury and lowers the deficit while the "Bush tax cuts" created the deficits. An honest analysis shows that simply was not the case. The money was rolling into the treasury after the tax restructure--it always takes six months to a year for such policy to actually show up in the economy--but unfortunately, Congress was spending more than was coming in, the huge lion's share of that on the war effort.
Would there have been as vigorous growth without the wars and the bonanza that provides to the defense industry? That is yet another factor to include in the mix.
Taxes, high or low, do not create deficits. Spending more than the treasury takes in creates deficit all of which accumulate to make up the National Debt currently more than 15 trillion and growing at 3 billion dollars per day. And if anybody thinks that is not a drag on the economy, that person understands economics not at all.
Taxes however, are the primary source of revenue for the federal government. What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth. Leave that out of the equation and you really are spinning your wheels within the context of supply sided economics. As is trying to break it down into per capita GDP without considering ratios of children too young to work and retirees no longer in the workforce within population growth.
Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
Here is the receipts and outlays, per capita and worker, over time.
No, they aren't 'just stories'. You don't provide a source or a context for your graph, and without including all economic factors that come into play, your graph may or may or may not show the story as you interpret it. War invariably increases the GDP and economic uncertainty invariably decreases it. Both situations were present in the Bush 43 administration and of course 9/11, Katrina, and the housing crisis were all factors in that.
When I say that Clinton 'lowered spending', he in no way actually spent less. The reforms implemented in his term of office only slowed down the rate of spending so that the rate of growth could begin catching up with it. Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
The graphs shown in my link is given context that people--most especially the middle class--were prospering under the Reagan supply side economy, but the argument against 'supply side' now is that raising taxes puts money in the treasury and lowers the deficit while the "Bush tax cuts" created the deficits. An honest analysis shows that simply was not the case. The money was rolling into the treasury after the tax restructure--it always takes six months to a year for such policy to actually show up in the economy--but unfortunately, Congress was spending more than was coming in, the huge lion's share of that on the war effort.
Would there have been as vigorous growth without the wars and the bonanza that provides to the defense industry? That is yet another factor to include in the mix.
Taxes, high or low, do not create deficits. Spending more than the treasury takes in creates deficit all of which accumulate to make up the National Debt currently more than 15 trillion and growing at 3 billion dollars per day. And if anybody thinks that is not a drag on the economy, that person understands economics not at all.
Taxes however, are the primary source of revenue for the federal government. What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth. Leave that out of the equation and you really are spinning your wheels within the context of supply sided economics. As is trying to break it down into per capita GDP without considering ratios of children too young to work and retirees no longer in the workforce within population growth.
Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
A debt clock is based on some estimate of daily deficit and does not report the actual debt. An estimate is plugged into the program and it just runs on the estimate. Occasionally, it is checked against the actual debt and corrected. A debt clock is not precise. If it was precise, it would have stopped running in 2001.
The budget was balanced. It ran a surplus. The total surplus for two terms was 62904. The Debt Held by the Public was decreased beginning in 1997. The Total Debt, including Intergovernmental Holdings was reduced in it's upward trajectory, stopping in 2001. Any debt clock would have stopped running if it was precise.
The Total Debt Outstanding consists of two parts, the Debt Held by the Public and Intergovernmental Holdings. The Total Debt Outstanding includes principle plus interest. The surplus (-deficit) is the excess of the budget. So the Total Debt increases by the sum of the deficit plus the interest.
The Debt Held by the Public decreased in the second Clinton admin term. It no longer added to the Total Debt. It began decreasing the Total Debt.
The accounting data originates with the Treasury Department. Daily balance sheets are available at Current and Back Issues: Daily Treasury Statement: Publications & Guidance: Financial Management Service
The yearly budget and surplus (-deficit) data, originating with the Treasury, is presented in nice reports at Historical Tables | The White House.
The final data for the debt comes from only one place, The Bureau of Public Debt. It is part of the Treasury Department. The original source of the data provides the most accurate and precise information including what the data means. This info is available at
Bureau of the Public Debt: Homepage
Government - Public Debt Reports
The Total Debt Outstanding consists of two parts, the Debt Held by the Public and Intragovernmental Holdings.
The Debt Held by the Public is all federal debt held by individuals, corporations, state or local governments, foreign governments, and other entities outside the United States Government less Federal Financing Bank securities. Types of securities held by the public include, but are not limited to, Treasury Bills, Notes, Bonds, TIPS, United States Savings Bonds, and State and Local Government Series securities.
Intragovernmental Holdings are Government Account Series securities held by Government trust funds, revolving funds, and special funds; and Federal Financing Bank securities. A small amount of marketable securities are held by government accounts. It is money that the government owes to itself.
Of course, it cannot be ignored. It was spend somewhere. But, when "repaid", the total government balance sheet goes up by $100. This is a bit different then the Debt Owed by the Public because when it is repaid, the government balance sheet does not go up by $100.
So, Intragovernmental Holdings are not the debt that is borrowed when we speak of the public debt. The Debt Held by the Public is the debt that we speak of. It is the debt that we pay interest on to parties outside the government.
The Debt Held By The Public went down during the second term of the Clinton admin.
The Total Public Debt, which includes intergovernmental transfers, slowed in it's upward trajectory, going flat in 2001
Considering the history of the government deficit and debt, that is pretty damn good.
"Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running."
That is a pretty biased interpretation. The surplus was erased during the Bush admin, for whatever reason. The surplus is from the budget. The data is available from the White House and Treasury Department websites. Conflagrating the surplus with the debt with someones debt clock doesn't change the facts of the budget.
It's really hard to do positive economics and narrow things down to the precise effects of government receipts and outlays, spending and taxes, when everything is filtered through a bias.
The bias is fairly obvious in skewing events in the direction of the preferred party. Bush had "contend with ... 9/11, a Katrina, or the housing bubble burst" and "two wars". This, even though, admittedly, " War invariably increases the GDP" Just as well, one of them was unnecessary.
On the other hand, though the Clinton admin ran a surplus and the Total Debt stopped accumulating in the last year, but a debt clock ran "at a somewhat slower pace". As well, Obama's administration has made the recession worse, though how much better it could be "we will never know". It couldn't be that he had the worse recession in history to contend with.
Data presented on government budget real receipts and outlays per capita or worker is obviously from one set of sources, the BEA, BLS, and Treasury Department. It cannot be from anywhere else. Yet the reply is "where does the data come from?" And this, even though it clearly shows an increase in receipts during the Bush admin. Even data that supports the hypothesis is rejected because it hasn't been previously vetted for the preferred bias.
I know that there is one reasonable deduction that can lead to a decrease in taxes. The magnitude of the effect is unknown. But we will never know from the champions of supply side. They make no effort to demonstrate it. The magnitude of the effect may be minor. And I am beginning to believe it is minor, for lack of any evidence.
"What a study of supply side shows....." would be true if there was an objective study.
"without including all economic factors that come into play" becomes just an excuse to pick and choose from events to make excuses.
There are three types of studies in normative economics, biased right, biased left, and unbiased. When your standing on the right side of the road, everything is to the left. And it seems that the biased right will never know because the see objective examination as being to the left.
There was one period of time that had tax changes and reduced spending. Supply side cannot be demonstrated with both decreased taxes and increased spending. Viewing the Clinton surpluses as "Oh, it didn't happen" makes in impossible to make an objective examination. We cannot ignore that the housing bubble was caused by any and all of the fiscal and monetary policies in the previous years.
It's amazing.
Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
You need to look at the actual budget. It is available from a couple of places including the budget office. I don't know what debt clock you were looking at, but whichever, they are not connected to anything. They estimate the rate of change based on something. It doesn't actually track the debt. That would be cool, the Treasury department does report the daily receipts and outlays.
Year Signing Pres Total Receipts Total Outlays Total Surplus
1994 Bill Clinton 1,258,566 1,461,753 - 203,186
1995 Bill Clinton 1,351,790 1,515,742 - 163,952
1996 Bill Clinton 1,453,053 1,560,484 - 107,431
1997 Bill Clinton 1,579,232 1,601,116 - 21,884
1998 Bill Clinton 1,721,728 1,652,458 69,270
1999 Bill Clinton 1,827,452 1,701,842 125,610
2000 Bill Clinton 2,025,191 1,788,950 236,241
2001 Bill Clinton 1,991,082 1,862,846 128,236
The Clinton budget was not only balance, it had a surplus.
This is verifiable. You can get the budget from a couple of sources. The Treasury department has a daily balance sheet by department.
The*President's*Budget for*Fiscal Year 2013 | The White House
Historical Tables | The White House
FDsys - Browse BUDGET
Maybe the interest payments offset the surpuls
Nor was the budget really balanced during Clinton's term--Democrats are so fond on saying how Bush erased a substantial surplus--but the debt clock was still running rapidly at the end of the Clinton administration, just at a somewhat slower pace than it would have been running.
You need to look at the actual budget. It is available from a couple of places including the budget office.…… I don't know what debt clock you were looking at, but whichever, they are not connected to anything. They estimate the rate of change based on something. It doesn't actually track the debt. That would be cool, the Treasury department does report the daily receipts and outlays.
Year…………Signing Pres…………Total Receipts……Total Outlays…………Total Surplus
1994…………Bill Clinton…………1,258,566……………………1,461,753……………………- 203,186
1995…………Bill Clinton…………1,351,790……………………1,515,742……………………- 163,952
1996…………Bill Clinton…………1,453,053……………………1,560,484……………………- 107,431
1997…………Bill Clinton…………1,579,232……………………1,601,116……………………- 21,884
1998…………Bill Clinton…………1,721,728……………………1,652,458……………………………69,270
1999…………Bill Clinton…………1,827,452……………………1,701,842…………………………125,610
2000…………Bill Clinton…………2,025,191……………………1,788,950…………………………236,241
2001…………Bill Clinton…………1,991,082……………………1,862,846…………………………128,236
The Clinton budget was not only balance, it had a surplus.
This is verifiable. You can get the budget from a couple of sources. The Treasury department has a daily balance sheet by department.
The*President's*Budget for*Fiscal Year 2013 | The White House
Historical Tables | The White House
FDsys - Browse BUDGET
Maybe the interest payments offset the surpuls
I went back and looked and the record does seem to show that the national debt actually went down a small bit in 2000. So I stand corrected that the budget was never balanced. It was balanced that one year. Again, whatever graphs or charts you use, if that debt clock is still running, the budget is not balanced and any surplus shown is not including all the outlays.
Also, though the Bush administration and Congress were in no way as restrained as the reform minded Congress that Clinton was blessed with, in spite of 9/11 and Katrina, economic growth was steadily bringing down the deficit during the last years of Bush 43's administration; and, if the housing bubble collapse had not happened in 2008, Obama could very well have also inherited a balanced budget.
At some point, increasing standard of living must become non-existent.
At some point, increasing standard of living must become non-existent.
Yes exactly, "Everything that can be invented has been invented.
Charles H. Duell, Commissioner, U.S. patent office, 1899"
A liberal always nails it!!! How do you do that??????
This remains, though, hypothetical. It requires being able to demonstrate both demand and supply side effect. It is, though, a better approach as it takes both as being valid hypothesis. It also hypothesizes that supply and demand side are temporary. In the end, both must be demonstrated as true or false. The proof of one does not disprove the other. The proof of an impulse effect will reveal any long term changes. If we can find the impulse, we can find the medium and long term affect.
targeting certain wealthy industries with tax increases
What a study of supply side does for us is to help understand how taxes affect economic behavior which in turn is reflected in overall economic growth.
one might say that China recently switched to supply-side capitalist economics( less liberal government) and instantly ended centuries of liberal demand-side en masse starvation.
China I suppose makes the case even better than Ireland!
Except that China only did that for only some in its showcase cities. There are large parts of China still embedded in crushing poverty untouched by economic prosperity elsewhere. Indeed capitalism is serving China well, but it is by no means a country that respects human freedom or any human rights.
ifprofit maximization for a company where [Profit] = [Quantity] * [Price] - [Total Cost]... because quantity isn't inversely proportional to price, there is a peak.
Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.
ifprofit maximization for a company where [Profit] = [Quantity] * [Price] - [Total Cost]... because quantity isn't inversely proportional to price, there is a peak.
Total Cost = [Quantity] * [Unit-Cost] - [Fixed-Costs]then
Profit = [Quantity] * [Price - UnitCost] - [Fixed-Costs]and then
........= [Quantity] * [UnitProfit] - [Fixed-Costs]
Profit(Quantity) ---> infinityi.e. "Profits are maximized, at maximum production", or "factories aren't built to run at half-speed". However, vast available Quantities will tend to "saturate" markets, driving down Prices, so reducing Profits "past some point of production"
asQuantity ---> infinity
Cain's 999 Plan is a bit more involved than meets the ordinary eye:Our economy would boom if BO eliminated the corporate tax altogether as Ireland proved by just lowering it. Its the ultimate vindication of supply-side economics.
Your premise is exactly the part of Cain's 9-9-9 plan that seems intuitive to me.....
e.g. "advertising" ?Demand-side economics is an economic theory which suggest that economic stimulation comes best from increasing the demand for goods and services.
how could "raising barriers" against economic activity, improve economic activity ? use of Government Force, to oppose economic activity, improves economic activity ?? i grab a "Government Gun", i tell you "no you cannot do that", thence "you can do more" ???Supply-side economics is a school of macroeconomic thought that argues that economic growth can be most effectively created by lowering barriers for people to produce (supply) goods and services, such as lowering income tax and capital gains tax rates, and by allowing greater flexibility by reducing regulation. According to supply-side economics, consumers will then benefit from a greater supply of goods and services at lower prices.
"the Fed is fast" whilst "Uncle Sam is slow":
