Originally Posted by JustPassingThrough

You cannot project out a "cost" for tax cuts the way you can for spending programs. Tax rates by themselves do not ensure a particular amount of revenue. It is tax rates in conjunction with economic growth the determine how much revenue comes in. If you have high rates and dismal growth, you will not get more revenue to the government than you would with low rates and high growth. Since high tax rates impede economic growth, raising rates never increases revenues as much as those imposing the increases predict.

Simply put, creating a graph like the one you posted requires a variety of assumptions to be built into the tax figures. Meaning that those making it can exaggerate the "Bush Tax Cut" portion pretty much at will.

Sorry, JTP, I'm not buying. These are CBO projections based on average GDP growth - anything less and the numbers get worse particiular for the drain caused by the Bush tax cuts.

Those tax cuts have been around since 2001 and 2003 - anyone who claims that those tax cuts have led to robust job creation, wage increases and substained federal revenues rather than gutting the middle class, further enriching the mega-rich, and an asset hyperinflation bubble that then lead to a pop, deflation, and nearly brought down the global finacial system, well to put it as nice as I can, those people have either been in a coma for the last decade, or their blowing smoke out their asses and hoping the rest of us remain so mired in a coma so as to not take notice.

Well, if you can't beat 'em, change the meme!

http://tpmdc.talkingpointsmemo.com/2....php?ref=dcblt

Republican Accuses Democrat Of Pushing Medicare Cuts In NY-26

Reeling from Democratic attacks on her support for Paul Ryan's Medicare plan in the NY-26 special election, Republican Jane Corwin has decided if you can't beat 'em join 'em. In an impressive act of political chutzpah, Corwin is now running ads accusing the Democrat in the race, Kathy Hochul, of trying to cut Medicare and Social Security benefits for seniors.

The ad, which attacks Hochul for backing "cuts to Social Security, cuts to Medicare, and higher taxes," is sourced to a passing statement from a debate last week in which Hochul said "everything should be on the table" in deficit talks, including unspecified entitlement cuts. But there's no question that defending Medicare from Republican cuts has easily been Hochul's top issue in the campaign, helping push her into a lead in the polls in the three-way contest. Corwin's retooled message, which makes no mention at all of the Republican plan or her own position on entitlements, appears to be a concession that attempts to sell the GOP's budget -- even in a right-leaning district -- have failed.

Now you have to admit that the GOP has been very successful in getting many Americans to believe that it was the federal deficit as well as Dem's policies that caused the Great Recession and the 2008 financial meltdown. And in the 2010 elections, they were successful in convincing many seniors that the GOP was the defender of Medicare against the Dems attempts to reduce benefits.

Now that the GOP has a plan in wrting, and voted on it, to destroy Medicare, let's see how dumb Americans can be with this latest propaganda twist.

Originally Posted by playwrite

Sorry, JTP, I'm not buying. These are CBO projections based on average GDP growth - anything less and the numbers get worse particiular for the drain caused by the Bush tax cuts.

Those tax cuts have been around since 2001 and 2003 - anyone who claims that those tax cuts have led to robust job creation, wage increases and substained federal revenues rather than gutting the middle class, further enriching the mega-rich, and an asset hyperinflation bubble that then lead to a pop, deflation, and nearly brought down the global finacial system, well to put it as nice as I can, those people have either been in a coma for the last decade, or their blowing smoke out their asses and hoping the rest of us remain so mired in a coma so as to not take notice.

On the contrary, anyone who believes those tax cuts were to blame for the downturn is economically illiterate. Income taxes have no effect on stock market transactions. That would be capital gains taxes. I'd also like to know how low tax rates "gut the middle class". I guess you think the middle class subsists on government handouts.

Originally Posted by JustPassingThrough

Obama's Post-Bin Laden Bounce Disappears In Gallup Poll

Yea, the economy is at the top of everyone's list - now there's some breaking news! Thanks for the update.

However, if you're pinning your hopes on the dwindling list of GOP stellar candidates -

http://latimesblogs.latimes.com/goss...-pregnant.html

Donald Trump not running for president, Rebecca Black not pregnant

- you might want to reflect on that like so many have already -
http://prospect.org/cs/articles?arti...p_fox_news_job

God Tells Huckabee to Keep Fox News Job

by thinking about this -

http://www.politico.com/news/stories/0511/54996.html

President Obama polls well despite jobs fears

...Republicans looking toward 2012 have consistently argued that the president’s reelection hinges on the economy — regardless of who emerges from the GOP field. That thesis is backed by the 15 percentage-point spread — 42 percent to 57 percent — between those polled who approve and disapprove of Obama’s handling of the economy.

But the president seems — at least for now — surprisingly immune to economic fears, the poll shows. Fifty-two percent of those surveyed approve of Obama’s handling of his job, up 7 percentage points from the most recent Battleground Poll, conducted in October. Additionally, 72 percent approve of Obama personally, up 7 percentage points since October.

The president’s strong approval ratings are buttressed by the 59 percent who said they will either “definitely” vote for the president or “consider” reelecting him. Thirty-eight percent “definitely will not” vote for the president’s reelection — giving Obama a higher ceiling of support than his Republican rivals would hope to see.

Obama’s recent spike in approval ratings across a number of prominent polls has been attributed to the killing of Osama bin Laden. While that may have altered views of the president’s overall performance, 84 percent said bin Laden’s death makes “no difference” in whether they plan to vote for Obama. Twelve percent said they are more likely to support the president, while 3 percent are less likely...

And then there is how he stacks up against the field. Really, you got Romney who has that "I was for my mandate before I was against Obama's mandate" thingee that the TP people are going to probable leave the GOP tent over. Or, you have Pawlenty who makes even Romney look interesting. From there it falls off pretty quickly to "select other" or to the nut cases like Gingrich and Bachmann.

But have heart, maybe Palin will come to your rescue. Hey, I can dream can't I?

Originally Posted by JustPassingThrough

On the contrary, anyone who believes those tax cuts were to blame for the downturn is economically illiterate. Income taxes have no effect on stock market transactions. That would be capital gains taxes. I'd also like to know how low tax rates "gut the middle class". I guess you think the middle class subsists on government handouts.

The vast, and I mean vast, majority of those funds went to mega rich people that had absolutely no need for that money for consumption. The vast amount of what would have otherwise been federal revenue (you know for things like keeping the deficit in check, maybe some infrastructure, maybe actually paying for two wars) instead went into your much ballyhooed private 'investments.' Given that the glut of global production capacity made any further investment in actual production (how shall we best say it, oh yea) stupid, the vast majority of those funds went into such new whiz-bang, fer-sure investments like collateralized mortgage instruments and the much bigger derivatives market based on those ‘fine investments.' And we all, unfortunately, now know where those ‘fine investments’ led us.

This only appears to be rocket science to those blinded stupid by partisanship and glibertarian hogwash of the last 30 years.

Ah, the latest wrinkle on the hole the GOP have dug for themselves -

http://www.npr.org/blogs/itsallpolit...-medicare-plan

Newt Gingrich Becomes Democrats' Weapon Against GOP Medicare Plan

Who knew Newt Gingrich would enter the race for the 2012 Republican presidential nomination and immediately become the Democrats' not-so-secret weapon against the House GOP's Medicare proposal?

But that's what Gingrich essentially did during his appearance on Meet the Press Sunday. He shot down the Republican plan to give future seniors a set amount of money with which to buy private health insurance instead of having Medicare serve as a single payer as it has since 1965.

Now, I recognize that the 2012 elections are about a year and half away and maybe something or many things come along to overshadow the GOP touching the 3rd rail (although my mom has friends who still vote a certain way because they remember what Truman did!).

However, here's the thing to consider - the GOP did this to themselves in less than 3 months since taking over the House; imagine what they can do to themselves over the next 18 months!

It is one thing to be on the outside and toss grenades with generalizations to cut the deficit or provide health care a different way. It is very much a different thing to hold some power in government and actually have to provide the necessary detail on what exactly you plan to do. As we've seen, the GOP really has no answers that are not either actually or politically insane.

And the inability of the GOP to actually govern is shown during typical times; but, these are not typical times. We have the TP people who are pulling the party to real insanity like threatening to eliminate the triple-A rating on our debt, and in the new fiscal year for the feds in the Fall, probable shutting down the government repeatedly.

I have joined many of my fellow Progressives at being disappointed in Obama. The House Republicans are here to remind not just Progressives, but a large majority of Americans, why we should consider ourselves extremely lucky.

Now sit back and enjoy the further fun the GOP is going to throw our way - not even the Keystone Cops could be this good!

Originally Posted by playwrite

The vast, and I mean vast, majority of those funds went to mega rich people that had absolutely no need for that money for consumption. The vast amount of what would have otherwise been federal revenue (you know for things like keeping the deficit in check, maybe some infrastructure, maybe actually paying for two wars) instead went into your much ballyhooed private 'investments.' Given that the glut of global production capacity made any further investment in actual production (how shall we best say it, oh yea) stupid, the vast majority of those funds went into such new whiz-bang, fer-sure investments like collateralized mortgage instruments and the much bigger derivatives market based on those ‘fine investments.' And we all, unfortunately, now know where those ‘fine investments’ led us.

This only appears to be rocket science to those blinded stupid by partisanship and glibertarian hogwash of the last 30 years.

There is one thing that can consistently be said about the modern left. They are illiterate about economics, because they don't care about economics. Their views on economic issues are not based on economics. They start with their ideological goals and biases, and then try to craft economic rationalizations for them. And that is their Achilles' Heel. All of the propaganda, spin and rationalizations are eventually blown away by economic reality.

Originally Posted by JustPassingThrough

There is one thing that can consistently be said about the modern left. They are illiterate about economics, because they don't care about economics. Their views on economic issues are not based on economics. They start with their ideological goals and biases, and then try to craft economic rationalizations for them. And that is their Achilles' Heel. All of the propaganda, spin and rationalizations are eventually blown away by economic reality.

Need I remind you that politicians can themselves create economic reality, and not always to good effect, through their own bumbling?

You could gain something by reading John Maynard Keynes' General Theory of Employment, Interest, and Money.

http://www.marxists.org/reference/su...eory/index.htm

I am surprised that it is offered without cost. Public domain? I am astonished! If you have never read it, then you are indeed as grossly ignorant of economics as you claim that others are. This decade is eighty years removed from the 1930s and what might have been a bad idea in the 1970s might be valid again. So goes the generational cycle. You will get more from this economic classic than you will by listening to Rush Limbaugh or his ilk.

In case you think that John Maynard Keynes was a devotee of Marxism , then he has Marxist critics:

http://www.marxists.org/archive/matt...955/keynes.htm

If you don't want to get your information from www.marxists.org , then by all means be a good supporter of capitalism and buy a copy from a for-profit, investor-owned corporate bookstore or an independent, owner-operated bookstore. I prefer the latter in accordance with my preference that there be a middle class with a stake in capitalism.

Originally Posted by JustPassingThrough

You cannot project out a "cost" for tax cuts the way you can for spending programs. Tax rates by themselves do not ensure a particular amount of revenue. It is tax rates in conjunction with economic growth the determine how much revenue comes in. If you have high rates and dismal growth, you will not get more revenue to the government than you would with low rates and high growth. Since high tax rates impede economic growth, raising rates never increases revenues as much as those imposing the increases predict.

Simply put, creating a graph like the one you posted requires a variety of assumptions to be built into the tax figures. Meaning that those making it can exaggerate the "Bush Tax Cut" portion pretty much at will.

Yes, you can. A huge chunk of the taxes will come from entities making easy money -- monopoly or cartel profits, executive compensation, and speculative gains. Certain tax rates -- like the zero tax rate that economic elites would get away with if they could -- indeed get a predictable tax revenue. Zero.

Tax cuts for the super-rich do not themselves create jobs or spur investment. If anything, we need more small-scale, mom-and-pop investments that put more people (as in whole families) to work. We used to have more small businesses in retail and restaurant trade, finance, and even banking. The current tax code favors cartelized, vertically-integrated firms that can squeeze out any competitor.

I figure that there will be economic growth after 2013. Tax revenues not collected will bloat the debt and will obligate future tax increases upon people who lack political pull. That means that the barber or the school teacher will pay a higher tax rate than some hedge fund manager or some heir.

Giant corporations aren't creating jobs; they are in fact doing everything possible to cut payroll -- laying people off and compelling people to take pay cuts and be ecstatic that they still get to work -- for much less, of course. But why should I expect any moral decency in your economic philosophy? Maybe you prefer that America act like the sort of place in which Marxism is deliverance.

Originally Posted by JustPassingThrough

You cannot project out a "cost" for tax cuts the way you can for spending programs. Tax rates by themselves do not ensure a particular amount of revenue. It is tax rates in conjunction with economic growth the determine how much revenue comes in. If you have high rates and dismal growth, you will not get more revenue to the government than you would with low rates and high growth. Since high tax rates impede economic growth, raising rates never increases revenues as much as those imposing the increases predict.

And I suppose you also believe that the lowering of taxes will increase, or have a neutral effect on revenues?

It's true that taxes have a variable effect on revenue that can't be predicted, especially not with great accuracy. But the same is true of attempting to balance the budget on tax cuts: there is no way of knowing how much revenue is actually being cut.

So no, you can't know whether or not tax increases will make up the deficit shortfall, but you do know that revenue will probably increase somewhat, and you don't know that cutting taxes will not have a very detrimental effect. So the proper thing to do is to attempt to balance the equation, not count on any singular thing to fix the problem.

Finally, your argument that high tax rates impede economic growth isn't really true. Economic growth happens totally independently of government policy. The 1990s boom was neither Reagan's nor Clinton's. It was caused by real economic factors like technological growth. Few government policies would ever be able to prevent that.

Originally Posted by Silifi

And I suppose you also believe that the lowering of taxes will increase, or have a neutral effect on revenues?

It's true that taxes have a variable effect on revenue that can't be predicted, especially not with great accuracy. But the same is true of attempting to balance the budget on tax cuts: there is no way of knowing how much revenue is actually being cut.

So no, you can't know whether or not tax increases will make up the deficit shortfall, but you do know that revenue will probably increase somewhat, and you don't know that cutting taxes will not have a very detrimental effect. So the proper thing to do is to attempt to balance the equation, not count on any singular thing to fix the problem.

Finally, your argument that high tax rates impede economic growth isn't really true. Economic growth happens totally independently of government policy. The 1990s boom was neither Reagan's nor Clinton's. It was caused by real economic factors like technological growth. Few government policies would ever be able to prevent that.

The Laffer Curve is a simple way of pointing out a basic reality. If you have a 0% tax rate or a 100% tax rate, you will get the same amount of revenue...none. Somewhere between those two poles is the ideal rate of taxation for maximizing revenue. What it illustrates is that the higher you raise taxes, the more you discourage productive economic activity. Income taxes are a tax on work. If you raise them high enough, people will not do work beyond the point at which they gain no benefit from it. That slows down the economy, which in turn results in less revenue.

So cutting taxes increases revenue to the degree that it spurs economic growth...which it always does. The debatable question is how much revenue is gained or lost in either direction, and therefore what the ideal rate is...and that is a very difficult thing to pinpoint.

Tax policy is not by any means the sole determiner of economic growth, but it is, without a doubt, a significant component. Your statement that "Economic growth happens totally independently of government policy" is extremely inaccurate, if taken at face value. When you consider all of the ways the government interferes with the economy, and in particular when you examine how various policies play out in different countries, it is undeniable that government action can have negative effects on economic growth. If what you mean is that government cannot create economic growth, you're correct. But it can definitely destroy it. And so, policies that remove the government boot from the economy's throat can be said to spur economic growth, even though they are merely removing impediments.

Originally Posted by JustPassingThrough

You cannot project out a "cost" for tax cuts the way you can for spending programs. Tax rates by themselves do not ensure a particular amount of revenue. It is tax rates in conjunction with economic growth the determine how much revenue comes in. If you have high rates and dismal growth, you will not get more revenue to the government than you would with low rates and high growth. Since high tax rates impede economic growth, raising rates never increases revenues as much as those imposing the increases predict.

Simply put, creating a graph like the one you posted requires a variety of assumptions to be built into the tax figures. Meaning that those making it can exaggerate the "Bush Tax Cut" portion pretty much at will.

LOL. The Bush Tax Cuts did not help the economy one bit.

One of the few good things Clinton did was raise taxes in order to get the deficit under control, and that certainly did not hurt the economy.

Originally Posted by JustPassingThrough

There is one thing that can consistently be said about the modern left. They are illiterate about economics, because they don't care about economics. Their views on economic issues are not based on economics. They start with their ideological goals and biases, and then try to craft economic rationalizations for them. And that is their Achilles' Heel. All of the propaganda, spin and rationalizations are eventually blown away by economic reality.

Actually, that describes Reaganomics perfectly, not the Left.

Originally Posted by Brian Rush

The elections of 2006 and 2008 happened, and constitute hard evidence every bit as much as that of 2010. The exit polls from 2010 have been taken, and clearly show that the result was due to a change in the composition of who voted, not of people changing their minds or rejecting overreach by the Democrats. The demonstrations in Wisconsin happened, and show the existence of strength on the left when activated. I knew it was there already because I follow these things on the Internet, where they primarily connect, and do not rely on the traditional media, which remains clueless. For the traditional media, the unrest in Wisconsin came as a total surprise and an emergence ex nihilo. For me -- and I suspect for the Millennials on this site -- they did not.

I keep looking for this left wing revolution, but still cannot find it. You can read DailyKos and DU to your heart's content and think that is some building movement, but the poll on issues simply do not show us moving in the direction of progressive solutions. Here is only the latest.

Presented with a menu of choices to help curb the national debt and federal deficit, almost half of voters — 45 percent — support spending cuts alone, the poll indicates. By contrast, only 13 percent favor an even split between cutting spending and raising revenue through tax increases.

By a margin of two-to-one, respondents also said they would be unwilling to see any increase in their own tax rates even if this helped reduce the debt and deficits. Only 28 percent said they would be prepared to pay higher taxes, while 56 percent said they would not...

Also, the proportion of respondents who favor some kind of tax increase as part of a budgetary fix — even if as a minor strand compared to spending cuts — totals 39 percent. (Fifteen percent would like to see $3 of spending trimmed for every $1 raised through new taxes and 11 per cent would like the ratio to be 2 to 1, along with the 13 percent who prefer a dollar of spending cuts to a dollar in higher taxes.)

here.


James50

Originally Posted by JustPassingThrough

The Laffer Curve is a simple way of pointing out a basic reality. If you have a 0% tax rate or a 100% tax rate, you will get the same amount of revenue...none. Somewhere between those two poles is the ideal rate of taxation for maximizing revenue. What it illustrates is that the higher you raise taxes, the more you discourage productive economic activity. Income taxes are a tax on work. If you raise them high enough, people will not do work beyond the point at which they gain no benefit from it. That slows down the economy, which in turn results in less revenue.

1. The Laffer curve has no empirical backing in econometric studies either across time or between countries.

2. High taxes do not discourage people from getting and keeping easy money. I would be tempted to say that very high taxes might cause people earn money the hard way (let us say work that causes disability) to work less. Taxing construction workers, coal miners, cleaners, food-service people, warehouse workers, or nurses heavily to ensure low taxes for heirs, executives, and speculators might be one way to get reductions in effort on the job.

3. Income taxes can be structured so that the working poor don't pay them -- which makes sense because taxing the poor creates only hardship. As a modification of the doctrine of Henry George -- tax the easy money in the form of economic rent (a different concept from rental paid on housing, cars, lodging, or a tuxedo) -- easy money doesn't create wealth; labor and entrepreneurialism do. Such makes sense if the system doesn't offer the cradle-to-grave welfare state.

4. Before you deride the 'socialist' welfare state, remember the benefits. Sure, taxes are high -- but vacations are longer. Bright kids get education as far as their grades and college board scores take them and don't have to concern themselves with debt that cripples their lives. The welfare state creates its own conception of productivity, and people don't rebel against it. Take a good look at the pattern of immigration to the US -- very little of it now comes from Europe outside of the former Soviet Union. if I were, let us say, a Belgian, I would see the USA only as a tourist destination.

So cutting taxes increases revenue to the degree that it spurs economic growth...which it always does. The debatable question is how much revenue is gained or lost in either direction, and therefore what the ideal rate is...and that is a very difficult thing to pinpoint.

Cutting taxes also feeds crony capitalists, corporate bureaucrats, and big landowners. Such generally does little to improve the lives of working people.

Tax policy is not by any means the sole determiner of economic growth, but it is, without a doubt, a significant component. Your statement that "Economic growth happens totally independently of government policy" is extremely inaccurate, if taken at face value. When you consider all of the ways the government interferes with the economy, and in particular when you examine how various policies play out in different countries, it is undeniable that government action can have negative effects on economic growth. If what you mean is that government cannot create economic growth, you're correct. But it can definitely destroy it. And so, policies that remove the government boot from the economy's throat can be said to spur economic growth, even though they are merely removing impediments.

Then why do we spend the most per capita on health care and get the 37th-best results? We Americans are among the lightest smokers in the world.

Originally Posted by James50

I don't follow this. Just because we can pay off our own debts by "printing money" says nothing about what the value of that money will be. The medicare situation will not be resolved by debt repudiation or rescheduling.

James50

The issue with Greece is debt in a currency not in their control. They have no way to resolve their crisis. Since Germany sets the value of the Euro, if they go for austerity, they get deflation. If they don't, they get high interest rates. They have no possibility to resolve their problem. For the US, our debts are in US Dollars, so inflation can be used to beggar our distant neighbors if it comes to that. I doubt it will, but the fact that the option is there makes all the difference.

Originally Posted by Justin '77

Iceland has and is repudiating. That's a big part of the reason why things are working out for them.

H-m-m-m. No, not really, They merely decided that a bunch of banking yahoos were responsible for their own mess, and refused to take-on any of their debt. Of course, other countries felt they should, but even considering it was out of the question. There are only 300,000 Icelanders. The debts were in the tens to hundreds of Billions. Telling them to take a hike was the only option they had ... and a good one for them. I doubt the reserve currency could be managed in the same way.

Originally Posted by James50

I keep looking for this left wing revolution, but still cannot find it.

You aren't looking for it or you'd see it. It's not limited to on-line now. But every time I bring up what happened in Wisconsin, you offer some sort of spin or excuse. This is something you don't want to accept, and presenting more evidence would clearly be a waste of time.

[T]he poll on issues simply do not show us moving in the direction of progressive solutions. Here is only the latest.

That is inconsistent with the following:

http://www.cbsnews.com/8301-503544_1...42-503544.html

http://www.rawstory.com/rs/2011/04/2...s-on-the-rich/

http://www.businessinsider.com/poll-...he-rich-2011-4

And I can see why: "By a margin of two-to-one, respondents also said they would be unwilling to see any increase in their own tax rates even if this helped reduce the debt and deficit"

[Emphasis added.] Put the question like that, you are automatically skewing the answer.

I would add that our tax system already penalizes the middle class while exempting the rich to far too great a degree. We have an incredibly lopsided income distribution in this country. Most people do not need to pay more in taxes. But some do.

Originally Posted by JustPassingThrough

On the contrary, anyone who believes those tax cuts were to blame for the downturn is economically illiterate.

Nobody seems to have pointed out that this was a non-answer, so I'll do it now. The assertion was not that the tax cuts were to blame for the economic downturn. The assertion was that they did not HELP the economy, which is not the same thing as HURTING it.

I would suggest that you familiarize yourself with at least this difference in concept before you offer any more observations about how "the left" is economically ignorant.

Originally Posted by JustPassingThrough

On the contrary, anyone who believes those tax cuts were to blame for the downturn is economically illiterate. Income taxes have no effect on stock market transactions. That would be capital gains taxes. I'd also like to know how low tax rates "gut the middle class". I guess you think the middle class subsists on government handouts.

Tax cuts on behalf of heirs, tycoons, executives, and big landowners are non-solutions except for attracting their campaign contributions and getting elected.

Let's see, what was it the president said a few weeks ago in his cunning speech about Medicare not being on the table?

Pelosi says Medicare on the table in debt talks

Reuters – House Minority Leader Nancy Pelosi listens to House Budget Committee ranking member Chris Van Hollen …

– Mon May 16, 11:57 am ET


WASHINGTON (Reuters) – Lawmakers looking for ways to reduce stubborn budget deficits should consider changes to the Medicare health plan for the elderly, House of Representatives Democratic Leader Nancy Pelosi said on Monday.

"I think Medicare's on the table," Pelosi said on CNBC. "We have to put it all on the table, see what works."

Originally Posted by JustPassingThrough

On the contrary, anyone who believes those tax cuts were to blame for the downturn is economically illiterate. Income taxes have no effect on stock market transactions. That would be capital gains taxes. I'd also like to know how low tax rates "gut the middle class". I guess you think the middle class subsists on government handouts.

I think we're looking at two different things here to a degree.

Lower tax rates are not what inflated the housing bubble, at least not as a primary contributing factor. And to the extent that bubble and its subsequent popping were a huge input to the recession, tax cuts are low on the list of "blame points" (since we as a society *love* to place blame; it's one of the things we collectively do best.)

However, real middle class incomes had already peaked and were falling in the '00s for the most part, and I do think lower tax rates made it harder for the government and the middle class to claw out of the hole as more of the wealth and the spending power were concentrated in a small percentage of entities. Meanwhile we've been seeing corporate profits and CEO pay hit record levels as the rest of us look at several years of pink slips, offshored jobs to India and reduced pay and benefits (or merely frozen if you're "lucky" as I've been). Do lower tax rates and "trickle down theory" do this in and of themselves? No. But they do feed into the mentality that says we have to kiss the butts of Big Business if we want to prosper as well, that corporate America, out of the goodness of their hearts, will share the bounty of rising profits with its workers and pass savings on to customers even when they don't have to. So any time someone suggests a little regulation to keep a competitive marketplace and a decent deal for labor, people scream "Socialism!" and "Job Killer!" as if corporate America hasn't already been killing jobs despite improving fortunes and record profits.

In short, we've bought the rhetoric for three decades that corporations are our friends who have our best interests at heart -- if only they could make and keep more money to "share" with us.

Originally Posted by ziggyX65

I think we're looking at two different things here to a degree.

Lower tax rates are not what inflated the housing bubble, at least not as a primary contributing factor. And to the extent that bubble and its subsequent popping were a huge input to the recession, tax cuts are low on the list of "blame points" (since we as a society *love* to place blame; it's one of the things we collectively do best.)

However, real middle class incomes had already peaked and were falling in the '00s for the most part, and I do think lower tax rates made it harder for the government and the middle class to claw out of the hole. Meanwhile we've been seeing corporate profits and CEO pay hit record levels as the rest of us look at several years of pink slips, offshored jobs to India and reduced pay and benefits (or merely frozen if you're "lucky" as I've been). Do lower tax rates and "trickle down theory" do this in and of themselves? No. But they do feed into the mentality that says we have to kiss the butts of Big Business if we want to prosper as well, that corporate America, out of the goodness of their hearts, will share the bounty of rising profits with its workers and pass savings on to customers even when they don't have to. So any time someone suggests a little regulation to keep a competitive marketplace and a decent deal for labor, people scream "Socialism!" and "Job Killer!" as if corporate America hasn't already been killing jobs despite improving fortunes and record profits.

In short, we've bought the rhetoric for three decades that corporations are our friends who have our best interests at heart -- if only they could make and keep more money to "share" with us.

In short, we've also bought in for 8 or so decades that the bureaucrats are our friends who have our best interests at heart---if only they could tax and bring in more money to "share" with us. Me, I tend to ignore the political arguments/BS relating to other peoples money and I strictly vote on my personal economic interests at stake.

Originally Posted by JustPassingThrough

There is one thing that can consistently be said about the modern left. They are illiterate about economics, because they don't care about economics. Their views on economic issues are not based on economics. They start with their ideological goals and biases, and then try to craft economic rationalizations for them. And that is their Achilles' Heel. All of the propaganda, spin and rationalizations are eventually blown away by economic reality.

I provide you with some analysis: A + B = C. Rather than provide any alternative analysis or rational critique, you instead have a hissy-fit about my lack of understanding.

This is actually a good example of what most people miss in reading Ayn Rand's work.

Most people get the message that "greed is good" and then divide along the lines of accepting that message or not based on previous tendencies toward or away from a self-centered personality bordering on sociopathic - pretty standard fare in assessing 'her contribution to society' (dripping sarcasm intended).

What's actually often missed, but in plain view, is the "out" she has given to her supermen (and, to the vastly greater numbers of wannabes). She made it honorable not to actually attempt to explain one's self-centered personality and behavior but rather to find a gulch to go pout in - to hurl from one's hid-out, "you just don't understand" to any attempt at questioning the cherished self-centered belief system or behavior.

With its two-prong message of a self-centered value system and others-can't-possible-understand is it any wonder that she is most-often discovered at the age of adolescence? Pressed hard to reveal the truth, most Randians will tell you that it was only her that was there for them when mom and dad sent them to their rooms.

Most people grow out of this stage; obviously, many have not.

Originally Posted by JustPassingThrough

The Laffer Curve is a simple way of pointing out a basic reality. If you have a 0% tax rate or a 100% tax rate, you will get the same amount of revenue...none. Somewhere between those two poles is the ideal rate of taxation for maximizing revenue. What it illustrates is that the higher you raise taxes, the more you discourage productive economic activity. Income taxes are a tax on work. If you raise them high enough, people will not do work beyond the point at which they gain no benefit from it. That slows down the economy, which in turn results in less revenue.

So cutting taxes increases revenue to the degree that it spurs economic growth...which it always does. The debatable question is how much revenue is gained or lost in either direction, and therefore what the ideal rate is...and that is a very difficult thing to pinpoint.

Tax policy is not by any means the sole determiner of economic growth, but it is, without a doubt, a significant component. Your statement that "Economic growth happens totally independently of government policy" is extremely inaccurate, if taken at face value. When you consider all of the ways the government interferes with the economy, and in particular when you examine how various policies play out in different countries, it is undeniable that government action can have negative effects on economic growth. If what you mean is that government cannot create economic growth, you're correct. But it can definitely destroy it. And so, policies that remove the government boot from the economy's throat can be said to spur economic growth, even though they are merely removing impediments.

I'm torn between wanting to pat you on the back for at least coming out of your pouting gulch to offer an explanation and wanting to bust up laughing at your use of the laughable Laffer Curve as the basis of your argument. Too funny.

First of all, even the most die-hard Laughable Laffers that have any integrity will tell you there is an apex to the curve that to the right means greater revenue can come from lower tax rates AND TO THE LEFT WHERE LOWER REVENUE IS OBTAINED FROM LOWER TAX RATES. It is beyond idiocy to claim that any cut in tax rates will always result in increased revenue - even if you believe in the Laffer Curve, you know it depends on where you start from.

The other thing is that there is a generalized Laffer Curve, but if such a curve actually exist it would be different with each economy AND different with what phase that economy is going through. It is actually extremely hard to draw a Laffer Curve based on empirical inputs and detailed assumptions. No one has done so where there is a consensus that it truly represents a particular economy.

Also, it is a little hard to justify either the validity of the theory or its actual utility when you compare the actual impacts of raising and lower tax rates in various periods such as Reagan's or Bush's tax cuts against Clinton's tax increases either in terms of economic growth, employment and wage increases or in terms of revenues generated for the federal government. At best, the picture is cloudy and certainly should not be taken as a panacea in our highly complex economic world.

And again, if you really want to try to understand what is going on, you need to get under the model and look at its assumptions rather than pout about people just don't understand.

The Laffer Curve is associated with Supply Economics where the assumption is that demand is insatiable and one only needs to produce more to meet as much of the demand as possible. By doing so, you are going to hire countless people to produce and they, in turn, will then have the incomes to translate their insatiable demand into actual purchasing power.

When that assumption falls apart, and it has, then the Laffer Curve become laughable. What you get, as I first pointed out, is flows of money (what would have gone to keeping the deficit in place, infrastructure, etc) into non-productive 'investment' that Wall Street was all-too-happy to provide, then comes asset inflation, bubbles popping, and, when the tide goes out, a lot of naked ugliness that was previously hidden.

If this doesn't sound familiar, you've been in a coma, or just plain stupid like this guy -

http://www.youtube.com/watch?v=MiNEeLBm1tM

- well, actually, all three of these people in this clip are morons, its just that Laffer is the worst (note - Schiff's 'hyper-inflation-is-around-the-corner, no-not-that-corner, the-next' routine for the last 3-4 years makes him seem like an idiot economist, but he sure has made tons of money off the inflationisties buying oil and commodities - the question still to be determine, however, is whether he will be a 'bag holder' or his followers.)