The ultimate vindication of Republican supply-side economics

[DSGE]

THE REAL SITTERS ON MONEY ARE SPECULATORS WHEN THEY EXPECT DEFLATION. It only benefits them to "abstain" from both consumption and investment.

More generally, when they expect falling NGDP. The idea behind what you're saying is that suddenly the return on money (through expected deflation) increases. So it's now worth foregoing consumption and instead holding money, at the margin, because now it gives you a little bit extra future consumption. But if NGDP is fixed (or growth in fixed), then any fall in the price level (due to productivity gains) is accompanied by an increase in real output. So if NGDP is expected to remain on target, it's not actually worth hoarding money, at the margin. You don't have to forego consumption now to be rewarded with more in the future since you're already getting more by the higher real output, so you should consume the same amount now as you already planned. So NGDP remaining on target doesn't distort intertemporal decisions, irrespective of what's happening to the price level.

 

[itfitzme]

Regardless, sometimes, government spending effects the economy with a multiplier effect.

mostly liberal BS. Private spending is far more likely to have a sustained multiplier effect. Think how pathetic and short sighted BO's cash for clunkers looks now.

I am really surprised by your assessment too, considering that government military contracts are a boon to state economies where they exist. It is hardly neutral.

taxes to let military contracts are not a boon so on balance you have a negative.



there is only one liberal government thats spends, while there are 300 million people who spend what they earn. Think about that.




what???????When liberal government spends $4 trillion and regulates key sectors of the economy they can overwhelm private good sense




if a huge sector of the economy, like housing, is growing because of one temporary liberal government policy then it is likely a bubble. If GDP is growing because of the private decisions of 300 million people spending money their own hard earned money it is likely not a bubble.



wrong wrong wrong. Friedman did exactly that. His economic theories and political theories were based on what he knew of human nature: someone who earns a dollar will spend it better than a fool liberal bureaucrat guessing in Washington.

And we cannot assess either the actual revenues and outlays or the effect unless it is in real dollars and per capita. Any other consideration is useless. And when looked at from a per capita basis, there is little evidence "that did precede largest revenue gain in American History".

I will always agree that precise scientific experiments are impossible in macro economics

First off, they were combined with increased outlays, completely eliminating any conclusion of it being tax cuts alone. Second, in real dollar, per capita terms, they were not the largest. They were modest at best and barely reached the level of revenues during the Clinton admin. At the very least, since efficiency and standard of living were increasing, they should have been higher.

(Oh, as a percentage of the GDP, in real dollars per worker and per capita would be better. Try that, see what you get.

not to mention we were in the runup to a huge liberal housing recession

What the hell are you talking about?

"someone who earns a dollar will spend it better than a fool liberal bureaucrat guessing in Washington.

What the H does that even mean? Anyone will spend a dollar better then someone else guessing. Since when is guessing an economic activity?

 

[EdwardBaiamonte]

What the H does that even mean? Anyone will spend a dollar better then someone else guessing. Since when is guessing an economic activity?

liberals guess where to spend or waste other peoples money, people who earn money spend it where it needs to be spent. BO's stimulus was 1000 liberal guesses about where to spend money, for example.

 

[itfitzme]

What the H does that even mean? Anyone will spend a dollar better then someone else guessing. Since when is guessing an economic activity?

liberals guess where to spend or waste other peoples money, people who earn money spend it where it needs to be spent. BO's stimulus was 1000 liberal guesses about where to spend money, for example.

Great. Now prove that

a) all fiscal and monetary "guessing" policy has always been "liberal"

b) the current presidency is the first "liberal" guessing program in the history of fiscal and monetary "guessing" policy.

c) fiscal and monetary "guessing" policy was less effective then the private spending that it crowded out. For that matter, demonstrate the crowding out effect in a single instance.

 

[Truthseeker420]

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.

Ireland currenly has 15% unemployment and a economy that is 15% below its peak and its still in recession, not to menion America already has one fo the lowers corporate taxes sin the world.
But dont let facts get in the way of conservative stupidity

 

[EdwardBaiamonte]

Great. Now prove that

a) all fiscal and monetary "guessing" policy has always been "liberal"

how would I prove it when its not true? What is true is that liberals socialists communists fascists Marxists and monarchists all believe more in taxing, spending, regulating and manipulating than conservatives.

b) the current presidency is the first "liberal" guessing program in the history of fiscal and monetary "guessing" policy.

if i said he was I'll pay you $10,000. Bet??

c) fiscal and monetary "guessing" policy was less effective then the private spending that it crowded out. For that matter, demonstrate the crowding out effect in a single instance.

the US has had less liberal guessing and wasting, and more capitalism than any country on earth and is the richest.

 

[Widdekind]

Friedman['s] economic theories and political theories were based on what he knew of human nature: someone who earns a dollar will spend it better than a ... bureaucrat guessing in Washington.

people spending "TOM" (their own Money) so spend, from the "economic front-lines"; bureaucrats spend "OPM", far removed from the "economic trenches". Allowing "economic grunts" to make economic decisions directly "from the ground" is more flexible, than decisions being made by a "remote HQ". Theoretically, "HQ" would have more (business) experience -- do politicians enter politics, after successful careers elsewhere, in business ?

liberals guess where to spend or waste other peoples money

once Money is "taken", it is no longer "other peoples'"

 

[itfitzme]

So basically, you can't demonstrate anything.

Case in point, you simply ignore the issue of the fact that there is little evidence of the Bushy admin cuts preceding the "largest revenue gain in American History", of that it had nothing to do with the increase in spending.

Faced with something with some teeth to it, actual and easily obtained data, you can't even get it up.

Regardless, sometimes, government spending effects the economy with a multiplier effect.

mostly liberal BS. Private spending is far more likely to have a sustained multiplier effect. Think how pathetic and short sighted BO's cash for clunkers looks now.

And think how pathetic were the stimulus check during the Bush admin. Had the the program been as big as the bank bailout, it would have been $4000 per person. That would have been a stimulus. So what, what's your point? That doing a crap ass job of gardening means that we should abandon agriculture?

I have no doubt that private spending is far more likely to have a sustained effect. Oh, wait, private spending is the sustained effect. It isn't far more likely to be, it is. So what's your point, that fiscal multipliers don't exists because the GDP exists?

And that there are fiscal multipliers isn't some sort of "liberal vs conservative" economics. It's simple fact, first proposed then demonstrated. In fact, it can be negative or positive. It can be less then one or more than one.

http://www.imf.org/external/pubs/ft/spn/2009/spn0911.pdf

http://academic.kellogg.edu/mckayg/macro/presentations/MacroPresentation11top5revised.ppt

Does fiscal stimulus work in a monetary union? Evidence from US regions | vox - Research-based policy analysis and commentary from leading economists

http://www.columbia.edu/~en2198/papers/fiscal.pdf

http://emlab.berkeley.edu/~auerbach/measuringtheoutput.pdf

And it isn't particularly astounding either. If Apple decides to build a factory in a region, the local economy increases by more than just the factory employment alone.

Recognizing that the fiscal multipliers exist, isn't some "liberal vs conservative" thing. I'm just saying that, unfortunately, that damned tax changes are accompanies by spending increases. And because they are, it's impossible to say that GDP changes were due to one and not the other.

You are such a f'in loon.

The interesting question is how much and when.

I am really surprised by your assessment too, considering that government military contracts are a boon to state economies where they exist. It is hardly neutral.

taxes to let military contracts are not a boon so on balance you have a negative.

Is that your opinion based on your vague "liberal vs conservative" theory of economics, or can you back that up with either some solid evidence or deductive reasoning?

there is only one liberal government thats spends, while there are 300 million people who spend what they earn. Think about that.

You cannot even get the size of the work force right. There are about 160 million people who spend, save, and borrow depending on economic factors, which is measured by the marginal propensity to consume.

what???????When liberal government spends $4 trillion and regulates key sectors of the economy they can overwhelm private good sense

That is great to say, in general. So can you prove when it has happened?
What $4 trillion? What regulations? To what key sectors?

if a huge sector of the economy, like housing, is growing because of one temporary liberal government policy then it is likely a bubble. If GDP is growing because of the private decisions of 300 million people spending money their own hard earned money it is likely not a bubble.

Show the median home prices and demonstrate how each of the obvious bubbles are clearly determinable before the fact. Show that everyone of them

wrong wrong wrong. Friedman did exactly that. His economic theories and political theories were based on what he knew of human nature: someone who earns a dollar will spend it better than a fool liberal bureaucrat guessing in Washington.

Bullshit bullshit bullshit. It has already been shown that you misrepresent Friedman on the gold standard. Clearly you cannot represent any economist's theories.

Even then, what does usually have to do with always and sometimes? Your full of selected generalities, picking and choosing with no demonstration that your "liberal vs conservative" theory is true in fact.

And what the f is a guessing? What kind of economic activity is a guessing? You mean like guessing paper?

Someone who earns a dollar will always spend it better then someone guessing. But first they have to earn it then they have to spend it and there has to be a product to spend it on. And all that is micro economics which is marginally attached to macro economics. The whole point of macro economics is that in the sum of all those micro-markets,

And we cannot assess either the actual revenues and outlays or the effect unless it is in real dollars and per capita. Any other consideration is useless. And when looked at from a per capita basis, there is little evidence "that did precede largest revenue gain in American History".

I will always agree that precise scientific experiments are impossible in macro economics

Your lack of ability doesn't mean others lack the ability. Do you even know what a natural experiment is? Or the basics econometrics? Do you even know what econometrics is?

First off, they were combined with increased outlays, completely eliminating any conclusion of it being tax cuts alone. Second, in real dollar, per capita terms, they were not the largest. They were modest at best and barely reached the level of revenues during the Clinton admin. At the very least, since efficiency and standard of living were increasing, they should have been higher.

(Oh, as a percentage of the GDP, in real dollars per worker and per capita would be better. Try that, see what you get.

not to mention we were in the runup to a huge liberal housing recession

What the f are you talking about? The bursting of the housing bubble was primarily the result of investment flipping on second, third and fourth single family homes. That, if anything, is a free market process. The history of economic growth has been punctuated by economic shocks and bubble bursts. Investment bubbles are the standard of capitalism. We love jumping on the bandwagon. The the bubble bursts and only the market leaders remain. So is every investment bubble a "liberal" bubble? Was every housing bubble a "liberal" bubble?

Pull down the median housing price data for the past half decade and demonstrate how each "obvious" bubble can be seen in any manner except hind sight.

And faced with the one thing that has some teeth to it, the question of whether the revenues during the Bush admin were somehow astounding, you can't even buck up.

Come on, dude, present some facts to back up your bs. Like a quote from Friedman on the "not following the rules of the gold standard".

You have basically said nothing useful that sheds light on the economic processes. Rather, all you have is this "anyone that points out I'm full of shit is a liberal" theory of economics."

Add some useful information. I'm begging you too, because in my experience, the nature of things is generally somewhere in between the two opposing opinions.

 

[itfitzme]

The claim is made "tax cuts cannot be blamed for a bad economy" What can be blamed? A lack of debt-paying power, buying power, hiring power - caused by contraction of money supply, or, more specifically, of shrinking of total loan-created checking deposits with which we pay debt, buy goods and hire labor. So how come this drain of purchasing power, of aggregate demand which makes businesses profitable and keeps them employing people? Here is the answer. All of our money is bank loans. Each loan must be paid back principal plus interest. Eventually every pulse of injected purchasing power is followed by an even bigger contraction - causing DEFLATION. (Not inflation - just check the price of a house, or of buying a boarded up factory, or a privatized government utility company of your very own.) The financial sector is not recirculating the interest paid on the debt that is owed it. They are not lending it to entrepreneurs for new American enterprise. Why not? Because sitting on those dollars during a deflation increases wealth more than risking them in a real-economy investment when aggregate demand is shrinking. It pays not to invest. It pays to hoard dollars. That is why Quantitative Easing dollars never found their way to investment in domestic production. This is not Austrian-School and its not Keynes. This analysis was offered by Irving Fisher to explain the Great Depression.

By God, thank you for a little bit of sanity. Now if you can just indisputably demonstrate the this, in fact, is correct in practice. Whether it is or ain't, at this point, is secondary to to the fact that is based on a real process and real effects.

And I am nothing less then frustrated by the underlying nature of the monetary system that seems to be just begging for a problem.

 

[Widdekind]

Revenues did not decrease after the Bush tax legislation of 2001 and 2003

that is not factually true -- Bush cut Taxes, and Government "revenues" returned to what they had been before Clinton; meanwhile Government spending remained what it had been, during-and-before Clinton

• spending was always high
• Clinton made Taxes (on some) even higher
• Bush eliminated those Taxes
• old deficits re-appeared

(Some) people got tired of paying Taxes, Bush was elected, Bush reduced (their) Taxes, old deficits re-emerged. Besides 9/11, Bush did not create the "spending programs", only stopped (some) people from paying for them. Blaming Bush uni-laterally (reducing Taxes), for a bi-lateral problem (Taxes & spending), is not "fair".

In the following chart, half of the "green" represents Military spending, the other half "discretionary" spendings. Within a few decades, the US population will be "old, senile, sickly, and deep in debt to everybody else":

anybody got better than "eat, drink, & be merry..." ? What does it mean, that Social-Security & Medicare are "mandatory", but defense is "discretionary" ?

 

[EdwardBaiamonte]

So basically, you can't demonstrate anything.

well, the US experience must demonstrate something????

the recent switch to capitalism in China must demonstrate something?

Cuba /Florida must demonstrate something???

East/West Germany must demonstrate something.

 

[EdwardBaiamonte]

And think how pathetic were the stimulus check during the Bush admin. Had the the program been as big as the bank bailout, it would have been $4000 per person. That would have been a stimulus.

but not a real stimulus merely a mal-investment stimulus or bubble that would burst into a recession or worse. If liberals could cause a real stimulus there would be no issue, they could always make the economy boom and Friedman would be toast.

 

[EdwardBaiamonte]

Come on, dude, present some facts to back up your bs. Like a quote from Friedman on the "not following the rules of the gold standard".

would the little boy like to bet $10,000 that he said it?? Or run away with his liberal tail between his legs again?

 

[EdwardBaiamonte]

What the f are you talking about? The bursting of the housing bubble was primarily the result of investment flipping on second, third and fourth single family homes.

If you read Reckless Endangerment you'll see it blamed over 400 pages on Fan /Fred. But our best economists and newspapers on right and left blame it on liberal government.

"First consider the once controversial view that the crisis was largely caused by the Fed's holding interest rates too low for too long after the 2001 recession. This view is now so widely held that the editorial pages of both the NY Times and the Wall Street Journal agree on its validity!"...John B. Taylor( arch conservative, author of the Taylor Rule)


" The Federal reserve having done so much to create the problems in which the economy is now mired, having mistakenly thought that even after the housing bubble burst the problems were contained, and having underestimated the severity of the crisis, now wants to make a contribution to preventing the economy from sinking into a Japanese Style malaise....... - "Joseph Stiglitz"

 

[Toddsterpatriot]

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.

Ireland currenly has 15% unemployment and a economy that is 15% below its peak and its still in recession, not to menion America already has one fo the lowers corporate taxes sin the world.
But dont let facts get in the way of conservative stupidity

America already has one fo the lowers corporate taxes sin the world.

Are you clapping for his idiocy?
America has the highest corporate tax rate in the world.

 

[itfitzme]

Revenues did not decrease after the Bush tax legislation of 2001 and 2003

that is not factually true -- Bush cut Taxes, and Government "revenues" returned to what they had been before Clinton; meanwhile Government spending remained what it had been, during-and-before Clinton

• spending was always high
• Clinton made Taxes (on some) even higher
• Bush eliminated those Taxes
• old deficits re-appeared

(Some) people got tired of paying Taxes, Bush was elected, Bush reduced (their) Taxes, old deficits re-emerged. Besides 9/11, Bush did not create the "spending programs", only stopped (some) people from paying for them. Blaming Bush uni-laterally (reducing Taxes), for a bi-lateral problem (Taxes & spending), is not "fair".

In the following chart, half of the "green" represents Military spending, the other half "discretionary" spendings. Within a few decades, the US population will be "old, senile, sickly, and deep in debt to everybody else":

anybody got better than "eat, drink, & be merry..." ? What does it mean, that Social-Security & Medicare are "mandatory", but defense is "discretionary" ?

It might be, and I am only guessing here, that SSI and Medicare is self funded through FICA taxes. SSI is an insurance program. We pay into it and we are due the benefits. I haven't seen anything that says how much is due though. Oh, and the entire problem off SSI burning through it's surplus is solvable simply by increasing the FICA tax. Another solution is simply to reduce benefits. A third is to do what they have done, increase the retirement age.

 

[EdwardBaiamonte]

Add some useful information. I'm begging you too, because in my experience, the nature of things is generally somewhere in between the two opposing opinions.

but your experience is based on a high perceptual IQ and a conceptual IQ in the profoundly retarded range. Hence, your childish, prove it prove it as if simple scientific macro economic experiments with all variables constant except one were possible.

 

[itfitzme]

Come on, dude, present some facts to back up your bs. Like a quote from Friedman on the "not following the rules of the gold standard".

would the little boy like to bet $10,000 that he said it?? Or run away with his liberal tail between his legs again?

How about one billion dollars?

If you could prove it, you would have have done so already instead of falling back on some third grade, "like to bet $10,000".

 

[EdwardBaiamonte]

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.

Ireland currenly has 15% unemployment and a economy that is 15% below its peak and its still in recession,

all of Europe is in a recession, except perhaps Germany, actually. Sorry

not to menion America already has one fo the lowers corporate taxes sin the world.
But dont let facts get in the way of conservative stupidity

actually we have the highest in the world now that Japan has lowered theirs, actually


World's Highest Corporate Tax Rate Hurts U.S. Economically ...US News & World Report | News & Rankings | Best Colleges, Best Hospitals, and more › Opinion › Economic IntelligenceCached
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Apr 2, 2012 – Joseph Mason is the Moyse/LBA Chair of Banking at the Ourso School of Business at Louisiana State University and a senior fellow at the ...

 

[EdwardBaiamonte]

If you could prove it, you would have have done so already instead of falling back on some third grade, "like to bet $10,000".

So for the 8th time you have decided not to take a legally binding bet but instead run away with your liberal tail between your legs?? Where is your confidence, really?