Trickle down economics does not work

[Jhhnn]

exactly the last of the supply side bubbles will be bonds and soon.

Why would it be, if we can avoid Repub efforts to crash the economy? Bonds are based & valued on debtor's ability to pay. That's still good, given the fact that the whole economy is deleveraging from the la-la-la who cares? speculative peak of the Bush years.

Non-performing assets have already been liquidated & marked down, some sold to the FRB where losses don't matter, financial companies reserves brought back from the absurd leverages of the Bush era non-regulatory regime.

What sort of financial shock do you think will occur for bonds to plummet, anyway?

 

[lotus503]

Why would it be, if we can avoid Repub efforts to crash the economy? Bonds are based & valued on debtor's ability to pay. That's still good, given the fact that the whole economy is deleveraging from the la-la-la who cares? speculative peak of the Bush years.

Non-performing assets have already been liquidated & marked down, some sold to the FRB where losses don't matter, financial companies reserves brought back from the absurd leverages of the Bush era non-regulatory regime.

What sort of financial shock do you think will occur for bonds to plummet, anyway?

I think the issue is two fold possible 3.
yields at near-record lows, but prices are at near-record highs.
6.4t of the bonds held are held by the US gov
5.1t foreign
it's an overbought market, primed for reversal and the last sense of security in markets.

I think the wealth loss will be substantial, more importantly investor confidence will be shattered.

 

[cybrsage]

Why would it be, if we can avoid Repub efforts to crash the economy?

Whew, that is easy to do, since republicans are not trying to crash the economy. Hear me out as to why:

It is an oft stated liberal/dem talking point that republicans pander to the rich and are basically owned by the rich. It is said with such conviction and so often that I think it is genetically hardwired into libs/dems to believe this is true.

If you believe this is true, then you know that a bad economy is terrible for rich people. Rich people like making lots of money and if no one has money to spend they cannot make money.

However, it is also an oft spoken talking point by libs/dems that the democratic party is for the poor...that the poor is their voter base. It stands to reason that, since all political parties want to increase their voter base that the dems want to make a LOT more poor people so they get more voters into their voting base.

Of course, the republicans do not want the democratic party to increase its voter base, and in fact wants to reduce it. To do this, the republican party needs to reduce the number of poor people out there.


Your own talking points show that republicans want less poor people while democrats want more poor people - so any economy destroying is something the dems want and do.

 

[Agent11]

You actually believe that.

 

[ivwshane]

Whew, that is easy to do, since republicans are not trying to crash the economy. Hear me out as to why:

It is an oft stated liberal/dem talking point that republicans pander to the rich and are basically owned by the rich. It is said with such conviction and so often that I think it is genetically hardwired into libs/dems to believe this is true.

If you believe this is true, then you know that a bad economy is terrible for rich people. Rich people like making lots of money and if no one has money to spend they cannot make money.

However, it is also an oft spoken talking point by libs/dems that the democratic party is for the poor...that the poor is their voter base. It stands to reason that, since all political parties want to increase their voter base that the dems want to make a LOT more poor people so they get more voters into their voting base.

Of course, the republicans do not want the democratic party to increase its voter base, and in fact wants to reduce it. To do this, the republican party needs to reduce the number of poor people out there.


Your own talking points show that republicans want less poor people while democrats want more poor people - so any economy destroying is something the dems want and do.

Lol!! Well done! With logic like that how could anyone argue against you?




Which logical fallacy do you think he's us

 

[ivwshane]

Whew, that is easy to do, since republicans are not trying to crash the economy. Hear me out as to why:

It is an oft stated liberal/dem talking point that republicans pander to the rich and are basically owned by the rich. It is said with such conviction and so often that I think it is genetically hardwired into libs/dems to believe this is true.

If you believe this is true, then you know that a bad economy is terrible for rich people. Rich people like making lots of money and if no one has money to spend they cannot make money.

However, it is also an oft spoken talking point by libs/dems that the democratic party is for the poor...that the poor is their voter base. It stands to reason that, since all political parties want to increase their voter base that the dems want to make a LOT more poor people so they get more voters into their voting base.

Of course, the republicans do not want the democratic party to increase its voter base, and in fact wants to reduce it. To do this, the republican party needs to reduce the number of poor people out there.


Your own talking points show that republicans want less poor people while democrats want more poor people - so any economy destroying is something the dems want and do.

Lol!! Well done! With logic like that how could anyone argue against you?




Which logical fallacy do you think he's using?

 

[uclaLabrat]

Whew, that is easy to do, since republicans are not trying to crash the economy. Hear me out as to why:

It is an oft stated liberal/dem talking point that republicans pander to the rich and are basically owned by the rich. It is said with such conviction and so often that I think it is genetically hardwired into libs/dems to believe this is true.

If you believe this is true, then you know that a bad economy is terrible for rich people. Rich people like making lots of money and if no one has money to spend they cannot make money.

However, it is also an oft spoken talking point by libs/dems that the democratic party is for the poor...that the poor is their voter base. It stands to reason that, since all political parties want to increase their voter base that the dems want to make a LOT more poor people so they get more voters into their voting base.

Of course, the republicans do not want the democratic party to increase its voter base, and in fact wants to reduce it. To do this, the republican party needs to reduce the number of poor people out there.


Your own talking points show that republicans want less poor people while democrats want more poor people - so any economy destroying is something the dems want and do.

Funny, Donald Trump himself said on the history channel during the show about Rockefeller, Carnegie and Vanderbilt that he actually enjoys economic slow downs, because he can buy things on the cheap when they would otherwise cost him more money, and then sell them during the good times.

Rich people have also weathered the recession much better than the poor, investments are back up, stock market is nearly back to pre-crash highs, etc.

You were saying?

 

[BoberFett]

Correct, but I think its a systemic failure not beholden to any particular politician.

OK, we're on the same page then. 🙂

 

[lotus503]

Whew, that is easy to do, since republicans are not trying to crash the economy. Hear me out as to why:

It is an oft stated liberal/dem talking point that republicans pander to the rich and are basically owned by the rich. It is said with such conviction and so often that I think it is genetically hardwired into libs/dems to believe this is true.

If you believe this is true, then you know that a bad economy is terrible for rich people. Rich people like making lots of money and if no one has money to spend they cannot make money.

However, it is also an oft spoken talking point by libs/dems that the democratic party is for the poor...that the poor is their voter base. It stands to reason that, since all political parties want to increase their voter base that the dems want to make a LOT more poor people so they get more voters into their voting base.

Of course, the republicans do not want the democratic party to increase its voter base, and in fact wants to reduce it. To do this, the republican party needs to reduce the number of poor people out there.


Your own talking points show that republicans want less poor people while democrats want more poor people - so any economy destroying is something the dems want and do.

the economy is global and there is just as much to be made when the economy is bad as when its good. Emerging markets, Equities etc.

Your argument is based on fallacy.

 

[Doc Savage Fan]

http://www.forbes.com/sites/jamesglassman/2012/07/11/the-facts-about-budget-deficits-how-the-presidents-truly-rank/

Reaganomics was no different than what we're doing now.

Clinton was helped by the tech bubble.

Bush II was helped by the housing bubble.

Obama and forward we're going to pay the price for decades worth of a false economy.

Reagan's economic policies led to the Great Moderation.

http://en.wikipedia.org/wiki/Great_Moderation

I think it's pretty obvious that Reaganomics was much more effective than Obamanomics in regard to economic recovery. However, I do agree with you that our current rate of deficit growth is unsustainable.

 

[lotus503]

Reagan's economic policies led to the Great Moderation.

http://en.wikipedia.org/wiki/Great_Moderation

I think it's pretty obvious that Reaganomics was much more effective than Obamanomics in regard to economic recovery. However, I do agree with you that our current rate of deficit growth is unsustainable.

See bolded, why do you think that is?

Thats part of my post above, Supply side and demand side are both toolbox to deal with economics. Reaganomics worked because of the type of issues our economy was facing at the time. It was the first time we borrowed from foreign sources in any meaningful way. The points on the laffer curve were in line with the idea of lowering taxes, they simply are not now.

The economic issues were facing now are entirely different than at the end of the carter admin. and by different I mean in nearly every fundamental way. It requires a different set of tools to resolve.

Had we during the Clinton years addressed the issue vs expanded on the issue we may not be in the shape were in now. Everyone remembers Clinton for budget balancing and surplus but the ugly truth is it was all masked asset inflation.

 

[Doc Savage Fan]

See bolded, why do you think that is?

Thats part of my post above, Supply side and demand side are both toolbox to deal with economics. Reaganomics worked because of the type of issues our economy was facing at the time. It was the first time we borrowed from foreign sources in any meaningful way. The points on the laffer curve were in line with the idea of lowering taxes, they simply are not now.

The economic issues were facing now are entirely different than at the end of the carter admin. and by different I mean in nearly every fundamental way. It requires a different set of tools to resolve.

Had we during the Clinton years addressed the issue vs expanded on the issue we may not be in the shape were in now. Everyone remembers Clinton for budget balancing and surplus but the ugly truth is it was all masked asset inflation.

I thought I was being clear...I believe that Reagan's economic policies were directly responsible for the Great Moderation. It's when we started deviating from the Taylor Rule after Bush took office that we got the housing boom and bust. This is also one of the reasons we're seeing increased volativity in our economy today.

Quantitative easing as a solution is only marginally effective; however, it's rapidly accelerating our deficit and creating long-term problems. Obamanomics is accelerating our nation's ultimate demise.

 

[lotus503]

I thought I was being clear...I believe that Reagan's economic policies were directly responsible for the Great Moderation. It's when we started deviating from the Taylor Rule after Bush took office that we got the housing boom and bust. This is also one of the reasons we're seeing increased volativity in our economy today.

Quantitative easing as a solution is only marginally effective; however, it's rapidly accelerating our deficit and creating long-term problems. Obamanomics is accelerating our nation's ultimate demise.

The Taylor rule only works within specific parameters, just like the laffer curve, the appropriate response would have been to apply demand side theory.

near the end of Clinton's First term. Instead we went balls deep into supply side and allowed Deregulation to create asset inflation. I know given massive debt it seems counter intuitive that we in fact need massive government spending and more demand side theory right now, but its factually accurate its what we need. We also need every single person to pay more in tax to help fund the spending and expansion. We need to cut both military and entitlements.

The issue is the government cannot be trusted in any sort of massive stimulus, they cant be trusted with more revenue.

Then there is the simple fact it may just be too fing later to really do anything about where we are without very prolonged economic misery.

What we certainly don't need is more supply side principles.

 

[momeNt]

Trickle down works just as intended. Puts the consumer heavily in debt and insulates the banks from collapse.

Debt jubilee time baby!

 

[Doc Savage Fan]

The Taylor rule only works within specific parameters, just like the laffer curve, the appropriate response would have been to apply demand side theory.

near the end of Clinton's First term. Instead we went balls deep into supply side and allowed Deregulation to create asset inflation. I know given massive debt it seems counter intuitive that we in fact need massive government spending and more demand side theory right now, but its factually accurate its what we need. We also need every single person to pay more in tax to help fund the spending and expansion. We need to cut both military and entitlements.

The issue is the government cannot be trusted in any sort of massive stimulus, they cant be trusted with more revenue.

Then there is the simple fact it may just be too fing later to really do anything about where we are without very prolonged economic misery.

What we certainly don't need is more supply side principles.

That seems to be an odd statement...just what are these specific parameters and how is this relevant over the past 12 years?

Anyway, here's a couple of interesting graphs that gives some good historical perspective on this subject.

 

[bfdd]

A Centrally Planned Government and Economy is trickle down. If you do not understand why, you are clearly an idiot who lacks rational problem solving abilities involving logic.

Person at top dictates how flow of money reaches the bottom. That's Trickle Down Economics 101. Why does it simply not exist in that form because Government is doing it besides a Bank or giant Corp? It doesn't, they've just convinced you that they are some how different. Why? Because they are the thieving class.

Our Government is ran by thieves and beggars. Politicians are the thieving class, while the Lobbyists are the beggar class. Wonder why everything is fucked? Just look at who's running the show.

 

[lotus503]

That seems to be an odd statement...just what are these specific parameters and how is this relevant over the past 12 years?

Anyway, here's a couple of interesting graphs that gives some good historical perspective on this subject.

A rules based monetary policy doesn't account for event risk and liquidity traps. Like I said it works within parameters, outside of those parameters different policy or theories are better suited.

 

[lotus503]

A Centrally Planned Government and Economy is trickle down. If you do not understand why, you are clearly an idiot who lacks rational problem solving abilities involving logic.

Person at top dictates how flow of money reaches the bottom. That's Trickle Down Economics 101. Why does it simply not exist in that form because Government is doing it besides a Bank or giant Corp? It doesn't, they've just convinced you that they are some how different. Why? Because they are the thieving class.

Our Government is ran by thieves and beggars. Politicians are the thieving class, while the Lobbyists are the beggar class. Wonder why everything is fucked? Just look at who's running the show.

"A Centrally Planned Government and Economy is trickle down."

In its purest sense this is correct, however tax and monetary policy within a Centrally Planned Government and Economy can have a more demand side effect. The correct answer to monetary policy is to use all the tools at our disposal depending on the circumstances and desired effect. Sometimes we need centrally planned economic theory, sometimes we need other principles. Our issue is we get dogmatic about it and limit the tools we can use.

"Our Government is ran by thieves and beggars. Politicians are the thieving class, while the Lobbyists are the beggar class. Wonder why everything is fucked? Just look at who's running the show."

I agree I just think its reverse, politicians are the beggar class, Lobby is the thieving class.

 

[Hayabusa Rider]

"A Centrally Planned Government and Economy is trickle down."

In its purest sense this is correct, however tax and monetary policy within a Centrally Planned Government and Economy can have a more demand side effect. The correct answer to monetary policy is to use all the tools at our disposal depending on the circumstances and desired effect. Sometimes we need centrally planned economic theory, sometimes we need other principles. Our issue is we get dogmatic about it and limit the tools we can use.

"Our Government is ran by thieves and beggars. Politicians are the thieving class, while the Lobbyists are the beggar class. Wonder why everything is fucked? Just look at who's running the show."

I agree I just think its reverse, politicians are the beggar class, Lobby is the thieving class.

Your problem is that you think 😛

Dogma rules!

I think it's truer every day that our system of government is hopelessly outdated, where people are making decisions about that which they have little time to understand at best, and where corruption and hubris and party considerations over national interests are the rule.

I'd love to institute a system where facts are determined by those who are qualified to make an analysis and given sufficient time to make recommendations. People who are recognized not for their party standing but by their peers as exemplary in character and ability, and task them to come up with fact finding and solutions. Then the legislature can unburden itself of it's inherent ignorance and the people from partisan principles. Yeah, it will never happen.

 

[Jhhnn]

A rules based monetary policy doesn't account for event risk and liquidity traps. Like I said it works within parameters, outside of those parameters different policy or theories are better suited.

Precisely. When the Taylor rule calls for negative interest rates, as in 2009, the whole thing falls apart. Monetarist policy theory is ineffective against a zero lower bound for interest rates.

Notice also how a lagging FFR contributes to bubble formation.

 

[Doc Savage Fan]

Precisely. When the Taylor rule calls for negative interest rates, as in 2009, the whole thing falls apart. Monetarist policy theory is ineffective against a zero lower bound for interest rates.

Notice also how a lagging FFR contributes to bubble formation.

The Taylor Rule is a relatively simple equation to provide guidance for setting the Federal Funds Rate. Around 1999, the Fed set rates that lagged behind the Taylor Rule guidance. As a result, the Fed reacted much too slowly at times which has fueled the volativity we've seen for the past 12-13 years. The formula is designed to show the best Federal Funds Rate for spurring growth without stoking inflation. The fact that you see a negative number is not an indication of any underlying issue with the rule. It's an indication of the consequences of slow "reactive" fiscal policy.

 

[schneiderguy]

Quality thread.

Thus far not a single Republican has produced any economic studies or otherwise viable data to prove that trickle down supply side economics actually works to increase economic growth.

Thanks for proving me right guys.

http://www.tsowell.com/images/Hoover Proof.pdf

Summary:
-No economist has ever proposed "trickle down" economics in the way that libruls understand it
-Top marginal tax rates have been cut 4 times in the last century, and every time the rich ended up paying more taxes and a higher percentage of overall taxes.

I'll just leave this quote here:

It was none other than John
Maynard Keynes who said, in 1933, that “taxation may be so high as
to defeat its object,” that “given sufficient time to gather the fruits, a
reduction of taxation will run a better chance, than an increase, of
balancing the Budget.”

 

[ivwshane]

http://www.tsowell.com/images/Hoover Proof.pdf

Summary:
-No economist has ever proposed "trickle down" economics in the way that libruls understand it
-Top marginal tax rates have been cut 4 times in the last century, and every time the rich ended up paying more taxes and a higher percentage of overall taxes.

I'll just leave this quote here:

All I read was that tax cuts lead to more revenue, I saw nothing proving it lead to a more prosperous middle and lower class.

I also did not see any deep analysis of the data and instead saw the author look at the data and draw conclusions without any regard to what policies and events were happening at the time. That would be me saying, during the 50's when taxes were at there highest the middle class grew the most, therefore higher taxes equal middle class growth. While it may be true if you just look at the data but it would be false when considering other factors that were happening at the time.