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"The Spend and Elect GOP"

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Tripleshot

Elite Member
Jan 29, 2000
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etech
I don't need theory at all. I gave you real world results.(albeit,my world at the time) I certainly understood what the ceo's were saying,and they weren't teaching in some university in thier off hours! They where scrambling to revamp there business models in a new and changing economy. That was reality,not economic theory 101.

Unless you where a wage earner and held a mortgage at the time,it may be difficult to understand the difference here between theory and number crunching by CPA's and the real impact on families. If need be,I will research and do that cut and paste here that some people find offensive,but I think I can find enough to substantiate what I am talking about.

My original point in this thread was to refute any notion that the Bush plan to re-visit supply side economics makes any sense. In fact,I think he doesn't have a plan,and when pressed to outline one,he shot from the hip and said he would use good ol' Ronnies plan.Hell yea,the conservative republicans can get behind that!It's got republican all over it!



G.Dubya has no economic plan other than the same camppaign promises every other candidate that ever runs for President gives, I think his is just a bit disingenuous when the wealthy get the largest portion and the working class gets a nickle. I trusted his dad once. I'll not trust another Bush again. "Read my Lips might" be genetic.
 

glenn1

Lifer
Sep 6, 2000
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Tripleshot, i think you might be redeemable after all... you at least seem open and receptive to logical argument :)

First, my comment ridiculing the statement, "the rich get richer, and the poor get poorer," was a slight misquote from the article you posted. The actual quote should have been "the rich got richer, while worker's wages stayed stagnant." I apologize for the misquotation, but not the sentiment. Even when quoted properly, it belies a socialist, class-warfare line of thought. Or another line i'm especially fond of from that same article, "...nothing worth having ever trickles down." They were both quotes from the article you posted, would you care to defend, or even explain either of those statements? A diatribe against an idea does not serve as a convincing argument against the same (even if it wasn't your original argument) :)

To those two sentiments the article expressed, I rebutt the following anecdote, since they were both anecdotes themselves - A socialist is a man who looks at a rich man's mansion, and says "no man should have a house like that." The capitalist is a man who looks at the house, and says "every man should have the chance to have a house like that."

Okay, you advance the argument that the 80s and the Reagan years were a time of shaky financial status, changing corporate law, high interest rates, and rising budget deficits. And, as you state, a lot of how you perceive the 80s depends on your point of view. Well, I won't attempt to speak to the state of mind of all folks back then (although i was around too, and so were most of the people i know). If we're going to go with anecdotal evidence though, pretty much everyone i know remembers the 80s as a time of relative prosperity, especially after the Stagflation days of the 70s before it.

Let's go through your points one at a time. As for "shaky financial status," i think we can agree that is a highly personal issue, that generalizations can't do justice to. Plenty of people did great in the 80s, some not so great. And i'd say that has as much to do with the vagaries of fortune, as did any policies or secondary factors. I believe it is fair to say that the economy was in an expansion (as measured by economists) for most of Reagan's term, and the 80s as a whole. That means opportunities existed for those who sought to pursue them. That not all might have achieved as highly as might have liked - well, that's the human condition. This was not the Great Depression we're talking about. So let's agree to this - i won't claim that the 80s were great for everyone, and you won't claim they sucked for everyone, deal? :)

Changing corporate law - partially true, but that's not Reagan's doing. Statutory law is passed by Congress, not the President. He might have influenced the legislation, true, but he is not the cause of it. What Reagan could and did influence, however, was the enforcement of regulatory oversight. In most cases, he backed off the levels of regulation significantly. Again, it's impossible to argue in a blanket fashion whether or not this had positive effects in every instance - it would be necessary to do so on a case by case basis. My opinion is that less regulation is generally to be preferred over more. You might disagree.

As for interest rates being high, that is true for a portion of Reagan's term, although he was not directly responsible. The credit/blame for that should go rightfully to a Reagan appointee, Federal Reserve Chairman Paul Volker. Volker's argument for doing so was to combat the high inflation that was running rampant at the time. And in that effort, he (Volker) was spectacularly successful. Real inflation declined from the teens in 1981-1982 to a more natural (for the period) level of about 5% by about mid to late 1983. Was it worth skying interest rates temporarily to 18% in order to kill the Stagflation dragon? I think it was. Current economists think so as well, and hold Volker to be perhaps the best Fed Chairman ever. Again, you might differ.

Now, on to a different matter. You state that i seem "lukewarm" to supply-side economics as well. Well, i don't know about lukewarm - i just honestly recognize its limitations. The effect of supply side economic policies, especially tax policies, show their greatest effects when taxes are high to begin with. The effects are much less, and moving towards neglible, when rates are low. Let me give an example.

Let's say we have two (theoretical) tax payers, one paying a top marginal rate of 99%, and the other paying 2%. If we cut both of their rates by 50%, which do you think will have the greater effect? Just as the top marginal tax rates are as unnaturally high in our 99% scenario, so they were also when Reagan took office (70%). You should see why supply-side would work much better when rates were 70%, than it would now, that the top marginal tax rate is about 39%. The point is that having the top rates above a certain level (and 70% is certainly above the threshhold, i would argue), serves as an extremely potent disincentive for any investor. At a certain level, the disincentive effectively disappears, and further rate cuts serve rather as an incentive, but an increasingly small one. That's because the numbers involved keep getting smaller. Again, if the top rate was 2%, cutting the rate a further 50% only yields an effective 1% of extra available investment capital. Comparing the two effects, removing disincentives is much more powerful than raising incentives of the two effects. Reagan, IMHO, understood this, and unleashed far more powerful forces by his action.

 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,440
5,513
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wow! someone else who seems to have paid attention in economics class! i'm a BA in economics myself, or at least i will be when i finish this spanish class.

edit: tripleshot, when you cut all tax brackets the same percentage, its still fair. of course the people who pay more are going to get more back, they paid in more to begin with. not necessarily the rich though (they don't always pay income taxes). the upper portion of the middle class will get back more than the lower portion, the middle class more than the working class, the working class more than the poor (they don't pay income taxes either).

oh, the shortfall here in texas was a revenue shortfall. somebody in the bureaucracy predicted the economic performance of the state wrong. that happens, people are human. the state still had a really damn big surplus, even with revenue not being up to predicitons. shrub can't really do a damned thing about it. why? cuz the executive of texas is split into 5 people. the goververnor has very little legislative authority. all he could really do is call the leg back in session right now, and are they really going to cut the budget to only make the surplus even larger? hell no. of course al gore comes down here and drags it through the muck and makes people think we're running a deficit, which we're not, and absolutely no one in the media says what really happened.
 

sciencewhiz

Diamond Member
Jun 30, 2000
5,884
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Russ is right when he says that the economy doesn't turn on a dime. Most economists admit that it takes between 8-12 years for a presidents economic policys to effect the economy. This means that right now we are living in Reagan and Bush's economy. The recession that got Bush kicked out of office was a result of Carter's economic policys.

I'm not defending dubya (I'm voting for Browne), but he is a heck of a lot better than Gore.
 

Moonbeam

Elite Member
Nov 24, 1999
67,360
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<< Most economists admit that it takes between 8-12 years... >>



Huh? Is this confession extracted from them on the rack? Are they normally adverse to telling the truth? How interesting that Republicans are responsible for Democratic ecomomies and visa versa. Most dentists recommend Crest brand.....

&quot;Everybody should have the opportunity to have a house like Gates....&quot;

We of the Odovorian Alliance established ourselves here in the Pleistocene to prevent the Mob of Har Ecol from converting the planetary surface into another of (his) lifeless palasades. The JURY had ruled against just such an 'opportunity' claim. It would behove you to factor the meaning of life and the true costs of your endeavors into your economic decisions. No self respecting race lives in it's own toilet.
 

Tripleshot

Elite Member
Jan 29, 2000
7,218
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glenn1
Hold on friend.;) I respect your position on the issue of supply-side economics but I don't agree with it (&quot;BASED on my real world Experience&quot;).I Think you express the knowledge garnered from paying attention in college economics classes served up to you by whatever professors politcal slant was preaching at the time. Your socio-economic situation may well have been much,much different than mine. But my expieriences where felt by more of the masses than those you seem to elude to. Perhaps your bike was nicer than my sons,because your daddy worked in a different field than I did.(I bet he wasn't an air traffic controller though!) Whatever,you get my point.

(second coffee,starting to wake up now)

I pasted the info in that post from a term paper on voodoo economics. The research and foot notes were available but I did not post them. I was responding to the condescending challenge leveled by our esteemed colleague Russ. If you wish to dispute the info in the post,have at it.
I didn't write it. It does very closely resemble my feelings on reagonomics. Thats all.There is some good in your post as well,and i do subscribe to some of the ideas you put forth. I am a social liberal,fiscal conservative. I do not support high taxes,nor re distribution of wealth. I support eliminating the marrige tax penalty and abolishing death taxes. I believe government has to be paid for and is needed to take care of world issues as well as domestic. I do not believe the marketplace should be the watch dog ala Msoft,Ford/ Firestone/ADM/ and pharmaicutical companies. I feel those that make the most pay the most,and I am for closing the loopholes the rich enjoy in there &quot;tax Shelters&quot;. I would jump up and down for fixed tax rate for all,as long as services are not diminshed and the standard of living for everyone is not deminished. Those that think there is not class warfare going on delude themselves. It has been going on for as long as life has been on this planet.If you dismiss out of hand ones opinions because you feel it is class warfare,than you are part of the problem as apposed to offering a solution.

I'll accept your aplology for calling me a Shill and Troll when you offer it up.

:Q


 

glenn1

Lifer
Sep 6, 2000
25,383
1,013
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Tripleshot...

You have my apology, since what i said obviously does not apply to your beliefs.

My thoughts on supply-side economics are partially based upon what i learned in college, yes, and partially what i have experienced in real life. I won't argue my good fortune growing up - my father was a maintainence mechanic, my mother a homemaker, so i don't think we fell into what is normally considered &quot;rich,&quot; but my father provided what he could for us, and i am and always will be very proud of him for his hard work ethic, and being a fantastically wise and sensible man.

And i do think that we will see the flat tax in our lifetime. It simply makes too much sense, and our current tax regime too unwieldy, IMHO.
 

ElFenix

Elite Member
Super Moderator
Mar 20, 2000
101,440
5,513
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flat taxes suck. reasons:
1. if the feds implement a flat tax, and the states keep doing what they do, some states will end up with regressive tax systems, which are entirely suck. (this is where people on the bottom pay a higher percentage of income than people on top). regressive tax systems exacerbate recessions, and can cause the gov't to actually lose receipts during an expansion, when the gov't should be running a surplus.
2. progressive tax schemes have the benefit of increasing gov't receipts during an expansion0 beyond a flat tax, keeping a brake on the economy to keep it from overheating, and allowing the gov't to pay off its deficit incurred during a recession. during a recession, the progressive tax lets people keep a higher percentage of their incomes as their incomes drop, and since the gov't has to go into deficit to keep up the spending level, it helps get the economy out of the recession, while keeping the recession from becoming as bad as it might.
 

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