Taxes needed to be lowered during Reagan's administration...you understand that, right?
Anyway, there are many reasons for wealth inequity.
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Taxes needed to be lowered during Reagan's administration...you understand that, right?I wasn't aware that tax rates have since returned to pre-Reagan levels. Oh they haven't? Well maybe that is why things aren't getting better and only continue to get worse. Next thing you will tell me is that the President doesn't have the authority to change tax levels himself.
No, I don't understand that.Taxes needed to be lowered during Reagan's administration...you understand that, right?
Anyway, there are many reasons for wealth inequity.
Taxes needed to be lowered during Reagan's administration...you understand that, right?
Anyway, there are many reasons for wealth inequity.
Then you don't understand one of the fundamental tenets of Keynesian economics.No, I don't understand that.
Then you don't understand one of the fundamental tenets of Keynesian economics.
I gave you many facts indicating huge successes of his economic policies bringing us out of a severe double dip recession...yet you ignore these facts and instead want to focus on blaming Reagan for our present day wealth inequities. You act as if subsequent administations since 1988 have been helpless to address this problem (who, in fact, have exasperated the problem through their own economic policies), choosing instead to blame our current wealth inequity problem on the economic policies of a President who left office nearly 3 decades ago.
Sigh.
The need to lower taxes in times of recession so that the public has more disposable income and ability to buy more products.Which fundamental tenet are you referring to?
I'm no economist, but that seems to me like a blatant mischaracterization of Keynesian economics. Are you sure you aren't thinking of the claim that the government should increase deficit spending during a recession?The need to lower taxes in times of recession so that the public has more disposable income and ability to buy more products.
Moonie, I apologize for going off topic. However, this exchange does give a little insight into the vast differences in the way liberals/conservatives think.
The need to lower taxes in times of recession so that the public has more disposable income and ability to buy more products.
Moonie, I apologize for going off topic. However, this exchange does give a little insight into the vast differences in the way liberals/conservatives think.
That as well. Both are Keynesian strategies for dealing with recessions. I had a discussion on this subject with eskimospy recently. I argued that the multiplier for tax reductions was much more effective than the multiplier for increased government spending.I'm no economist, but that seems to me like a blatant mischaracterization of Keynesian economics. Are you sure you aren't thinking of the claim that the government should increase deficit spending during a recession?
I don't remember you "winning" that argument. I also can't find any sources saying Keynes said anything about cutting taxes during a recession.That as well. Both are Keynesian strategies for dealing with recessions. I had a discussion on this subject with eskimospy recently. I argued that the multiplier for tax reductions was much more effective than the multiplier for increased government spending.
I thought the study I cited was quite credible. How long have you been posting here? No one "wins" an argument with eskimospy....everybody knows this. I respect him greatly all the same.I don't remember you "winning" that argument. I also can't find any sources saying Keynes said anything about cutting taxes during a recession.
Which source was credible? The Heritage one (lol) or the IMF one which didn't say what you thought it said? Eskimo and Bitek both dismantled your claims pretty thoroughly, yet instead of attempting to rebut them in that thread, here you are claiming they are still valid.I thought the study I cited was quite credible. How long have you been posting here? No one "wins" an argument with eskimospy....everybody knows this. I respect him greatly all the same.
As to your inability to find sources regarding something which is so widely known, I can only say that you must not be trying very hard.
What are you trying to say...that tax decreases are not an effective strategy in times of recession? If so, please cite your sources.Which source was credible? The Heritage one (lol) or the IMF one which didn't say what you thought it said? Eskimo and Bitek both dismantled your claims pretty thoroughly, yet instead of attempting to rebut them in that thread, here you are claiming they are still valid.
No, I am saying I am not sure that is what Keynes actually advocated, see my edit above.What are you trying to say...that tax decreases are not an effective strategy in times of recession? If so, please cite your sources.
The need to lower taxes in times of recession so that the public has more disposable income and ability to buy more products.
Moonie, I apologize for going off topic. However, this exchange does give a little insight into the vast differences in the way liberals/conservatives think.
No, I am saying I am not sure that is what Keynes actually advocated, see my edit above.
In Keynesian economics, a tax cut has the effect of increasing GDP via the fiscal multiplier. Theories which incorporate Ricardian equivalence such as the real business cycle theory however have tax cuts producing no or little change in national income. In these models, agents anticipate future tax rises to pay for government spending and cut their own spending. In New Keynesian economics, tax cuts give a greater stimulus to the economy than that of increases in government spending.
To start out, we turned to testimony by Mark Zandi before the Senate Finance Committee on April 14, 2010. Zandi is the chief economist for Moody's Economy.com and a former adviser to Republican Sen. John McCain during his 2008 presidential campaign. Page 5 of the testimony contains a table that summarizes Zandi's calculated "bang for the buck" for various fiscal stimulus programs. Spending $1 on unemployment insurance benefits, for example, increases the GDP -- the value of goods and services that the economy produces -- by $1.61 a year later, according to Zandi. (We found some counter-arguments in a previous Truth-O-Meter item checking New Hampshire Sen. Jeanne Shaheen's use of Zandi's data.) A temporary increase in food stamps has the biggest stimulative effect. For each dollar spent, GDP grows by $1.74 one year later. For spending increases as a whole, the "bang for the buck" ranges from $1.13 for the Low-Income Home Energy Assistance Program to $1.74 for food stamps.
The former economist for the GOP presidential candidate also looked at the stimulative effect of tax cuts. Making the Bush income tax cuts permanent has a multiplier of 0.32, which means that for every dollar the government cuts in taxes, GDP grows by $0.32. Cutting the corporate tax rate also has a multiplier of $0.32. According to the chart, the most stimulative tax cut initiative would be a job tax credit, which has a multiplier of $1.30.
So based on Zandi's research, Maddow is on solid ground. All but one of the spending programs that Zandi analyzed have a multiplier significantly higher than one. The highest multiplier for tax cuts is $1.30.
Here is a good write up and it discusses the 80's as well:
http://www.econlib.org/library/Enc/KeynesianEconomics.html
So Keynesian theory predicted that the tax cuts would not help, yet Doc is claiming that according to Keynesian theory the tax cuts were necessary....
The massive U.S. tax cuts between 1981 and 1984 provided something approximating a laboratory test of these alternative views. What happened? The private saving rate did not rise. Real interest rates soared. With fiscal stimulus offset by monetary contraction, real GNP growth was approximately unaffected; it grew at about the same rate as it had in the recent past. Again, this all seems more consistent with Keynesian than with new classical theory.
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The economy of that period is highly complex and was affected by many forces unrelated to the tax cuts. I quoted Wikipedia in a post above which clearly states Keynesian and New Keynesian thought regarding tax cuts and their affect on our economy.Interdasting:So Keynesian theory predicted that the tax cuts would not help, yet Doc is claiming that according to Keynesian theory the tax cuts were necessary.
Keynesian theory, according to ivwshane's link anyway, says tax cuts have a fiscal multiplier of about 0.32 which is awful. Maybe you don't understand any of this as well as you think you do?The economy of that period is highly complex and was affected by many forces unrelated to the tax cuts. I quoted Wikipedia in a post above which clearly states Keynesian and New Keynesian thought regarding tax cuts and their affect our economy.
Surely not as good as you seem to.Keynesian theory, according to ivwshane's link anyway, says tax cuts have a fiscal multiplier of about 0.32 which is awful. Maybe you don't understand any of this as well as you think you do?
Well you are the one who seems to think that the statement that something can increase the GDP via the fiscal multiplier automatically means that it is good. Are you saying you don't think that? Why did you bold that statement for Eskimo then?Surely not as good as you seem to.
IIRC, my discussion with eskimospy was specifically related to which method of stimulus was more effective...he thought spending was more effective than tax cuts and I thought the opposite. I bolded that particular statement to show that New Keynesian's share my opinion as well.Well you are the one who seems to think that the statement that something can increase the GDP via the fiscal multiplier automatically means that it is good. Are you saying you don't think that? Why did you bold that statement for Eskimo then?