Yes that was the conversation you were having there. The bolded statement does not support your assertion at all. The fiscal multiplier for the tax cuts in 1981 was 0.32 which is abysmal if I understand this correctly.
Here it is.
Yes that was the conversation you were having there. The bolded statement does not support your assertion at all. The fiscal multiplier for the tax cuts in 1981 was 0.32 which is abysmal if I understand this correctly.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.
Here it is.BTW, can you link that thread? I think we should move this discussion there.
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.
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.
BTW, can you link that thread? I think we should move this discussion there.
I'm certainly no liberal, but I think the 80s may have been the last time that tax cuts could be more effective than increased government spending even though philosophically I prefer tax cuts and oppose increased government spending. Tax cuts make it more attractive and more possible to engage in new business ventures and take new economic risks, spurring the economy. Yet with our overall tax and regulatory structure, investing in a new business venture is usually more attractive outside of the USA. You can even get tax breaks specifically to help cover your costs.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.
BTW, can you link that thread? I think we should move this discussion there.
This discussion is about Reagan's policy and you want to switch gears to Obama in order to avoid discussing the failures of trickle down economics. I'm so surprised. Keep pretending that the spike to over 3% during Reagan's term after decades of staying around 1.5% or less is Obama's fault. Conservative debate style, lol. Deflection, misdirection, revisionism.
Post 183I'm not really following but its common with these types of things to try and trap someone into arguing a point they don't actually believe. So where did doc state he thought trickle down economics worked?
Post 183
The chart shows income inequality spiking to levels in 1986 that had not been seen for decades. The tax cuts were never fully reversed, so of course things continued to get worse even after Reagan was gone.I'm not really following but its common with these types of things to try and trap someone into arguing a point they don't actually believe. So where did doc state he thought trickle down economics worked?
Upon rehashing it would seem he linked some facts he thinks supports Reaganomics and you fire back with a chart showing wealth inequality skyrocketing post Bush-era tax cuts, which Obama extended anyway so its not really a partisan issue to begin with. The Bush tax cuts AFAIK dis-proportionally favored the rich. Not that its the root cause of inequality IMO as I think the root cause was the banking deregulation by Clinton.
Long story short... Liberals just as retarded as conservatives... at least conservatives don't pretend to be smart. I'm very much so in the center. I thought bush was a bad choice. I liked Clinton, I don't think he knew the pandoras box he opened by deregulating the banks. Reaganomics I'm kind of meh... I wasn't alive. Obama is a huge disappointment even if you voted for him and are honest with yourself IMO. The leadership is just not there. Although I don't think Romney would have been any better. Bush is the one who ultimately started running huge deficits.
Do you think you are born with a certain IQ or do you think you can become a democrats and say... gain 10 points?
Here's a study that says that deficit-financed tax cuts are a more effective stimulus method than government spending. I seen other studies which support this as well but don't have a lot of time right now to dig them up.I recall reading that thread and may have posted in it.
You can put pencil to paper and calculate the affect of the two notions you mention. I'd think that there are fewer variables in targeted stimulus than any other stimulus approach. So... it depends on who is getting the money to spend and the velocity involved. I'd think 'spending' to be more effective than tax reduction and mainly because unemployed folks go to work faster... probably. They then don't collect and hopefully pay into the coffer while the tax approach may take a much longer time to produce economic change. Time is the key factor and especially when you consider the mind set of the population. They act differently based on what they think is going on regardless of the reality.
I recall reading that thread and may have posted in it.
You can put pencil to paper and calculate the affect of the two notions you mention. I'd think that there are fewer variables in targeted stimulus than any other stimulus approach. So... it depends on who is getting the money to spend and the velocity involved. I'd think 'spending' to be more effective than tax reduction and mainly because unemployed folks go to work faster... probably. They then don't collect and hopefully pay into the coffer while the tax approach may take a much longer time to produce economic change. Time is the key factor and especially when you consider the mind set of the population. They act differently based on what they think is going on regardless of the reality.
Our evaluation of the evidence suggests that the $2.85 billion in vouchers provided by the program had a small and short-lived impact on gross domestic product, essentially shifting roughly a few billion
dollars forward from the subsequent two quarters following the program. The implied cost per
job created due to the program was much higher than what was estimated for alternative fiscal
stimulus programs. This does not account for the decrease in the capital stock stemming from
the program’s requirement that the traded in used cars be destroyed.
That was a huge error...no doubt about it. However, government employees didn't lose their jobs and got all their back pay if I recall correctly. But damn, no argument here, that whole debacle was really stupid!^^^
Perhaps the most misguided "stimulus" of all is laying off govt workers in the face of already massive unemployment. It's called "expansionary austerity".
The effect is immediate & stimulates the economy the same way that anal rape stimulates the victim.
That was a huge error...no doubt about it. However, government employees didn't lose their jobs and got all their back pay if I recall correctly. But damn, no argument here, that whole debacle was really stupid!
None of those links support a decline in government jobs as a direct result of the 16 day government shut down. Did you not understand what I said?That's not really true at all. Govt employment has been shrinking steadily because of budget cuts-
http://www.motherjones.com/kevin-dr...ic-vs-private-employment-under-bush-and-obama
http://www.politicususa.com/2012/06/26/comparing-employment-levels-government-reagan-obama.html
http://www.calculatedriskblog.com/2013/06/employment-report-comments-and-more.html
Just examples. Conservatives were highly critical of Obama Admin efforts to help fund state govt in the early stages of this lesser depression, as well. Revenue contraction for some state govts was enormous at the time.
None of those links support a decline in government jobs as a direct result of the 16 day government shut down. Did you not understand what I said?
Edit: Ah, I reread and see that I misunderstood you. I thought you were referring to the government shutdown. My bad.
Here's a study that says that deficit-financed tax cuts are a more effective stimulus method than government spending. I seen other studies which support this as well but don't have a lot of time right now to dig them up.
http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2005-039.pdf
Without knowing the specifics of either a tax cut or a spending program one cannot look forward and predict much of anything. Looking backward is valuable IF all the factors are the same as what a program considers and therefore what it expects will occur should have a higher probability than otherwise, but they never are. Some may be similar and you can perhaps give appropriate weight to the those but you've to employ caution when including the dissimilar bits which you, of course, must.
I love it when good economic news pops out which had little or nothing to do with the implemented policy and folks pound their chests claiming credit for that news... no nexus no credit.
I will always favor targeted 'spending' over a tax cut for lots of reasons but one is that tax cuts affect all the tax payers while building a bridge or a dam is far more targeted and quicker. However, a tax cut does have a positive mind set affect while being rather hard to terminate (politically).
Cash for clunkers was generally thought to be a failure but it did have some good results which could have been better if they allowed the cars to be sold to folks. I wonder how many jobs would have been created declunkering those cars using the Bush bucks? Maybe not...
End of the day... The Monetary policy maker actions are almost instantaneous in their affect IF the issue is within their ability to affect. Hopefully they, Treasury and Congress talk to each other.
[EDIT] I should say that a reallocation tax policy from Moonbeam to me, for instance, is not, as I see it a stimulus but it really is if you're a Liberal.
(... cut)
Funds could have been better used for economic growth by handing out debit cards with requirements attached every six months as to what could be purchased with funds.
The objective of cash for clunkers was to support the auto industry, encourage production to meet demand. Used cars don't do that.
Yes... but, I said maybe some of the clunkers could have been repaired by folks who to them the clunkers were upgrades and Exxon would have loved to see them gobbling up gas and the repair shops might have licked their lips in anticipation. IOW, could there have been a modification that worked? I don't know...()