|
|
| Posted: 18 Oct 2007 21:19 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
So much for job creation...
And for those curious as to where the line went after 2005...
"Supply-Side economics! Let the Democrats mop up!"
|
| Posted: 18 Oct 2007 22:07 |
|
|
|
Captain America
|
|
|
Helpful and packed with info, therefore utterly useless on this site.
|
| Posted: 18 Oct 2007 22:12 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
Thanks Cap. I wouldn't say useless though.
That deafening silence is music to my ears.
|
| Posted: 19 Oct 2007 04:08 |
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
I'm sorry, were you talking to me?
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 19 Oct 2007 07:41 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
I just don't think there's anything left to say on this topic.
The official stats break down just like one would think- in cases where more money has been concentrated in the hands of the already wealthy- we have instability at best, severe unemployment spikes at worse. Sometimes the wealthy reinvest in the economy, and sometimes they don't at all.
And on the flip side, when we have a balanced budget, progressive taxation and give everyone a chance to participate in the economy- unemployment gradually and predictably drops. Fewer people go on the dole.
Apparently, if the 90's are an example, you can even fight 3 wars, cut federal spending, cut state spending and offer more federal grants and come up with a SURPLUS at the end with an awesome economy, IF you just give Joe Citizen a chance and reject "voodoo-economics" for... actual economics.
|
| Posted: 19 Oct 2007 15:12 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
Geez, if all that's true, Milton Friedman oughta give back that Nobel Prize for economics. More later.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 19 Oct 2007 17:10 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
Perhaps so! But he's dead. Besides, who gets a Nobel is not always agreed upon.
Look some of Friedman's ideas weren't bad-some of those ideas are dead on- but some are crazy. He was such a fan of market corrections that he seems to forget that people went through some pretty bad stuff while it righted itself.
For instance, he thought getting rid of licensing would be good for the medical profession. In other words- that guy who tried liposuction on his friend with a vacuum cleaner was legal and can work as a doctor.
Yeah, people end up spotting the truth behind things eventually, but sometimes that takes a while. Individual bad luck isn't the only result. If enough people choose wrong for long enough- then we all end up in a really bad spot- especially if Mr. Gore is right. How free is it for me to have to suffer the effects of Chinese pollution? If politicians are bought by companies, how free are we then?
Friedman had plenty of chances to try this stuff in the Nixon, Reagan and Bush Whitehouses. Each time- instability and high unemployment. The stats haven't born this guy out.
Not to mention his ideas were essentially the policy before the New Deal. Though Friedman claimed the New Deal was bad- we pulled out of that and came up with the most affluent society in the history of civilization under those programs.
Besides, Friedman was a libertarian, but wasn't a supply-sider. So far as I'm aware there haven't been any awards for that yet.
|
| Posted: 19 Oct 2007 17:22 |
|
|
|
Captain America
|
|
|
That's what I was trying to say the other day, in the other thread: The policies that people like Friedman, Reagan, Bush and even Coolidge and Hoover fail over and over again. But people (representing the wealthy few who benefit from them) keep propping up the philosophies that back them. It's crass at the very least and destructive for the vast majority of people on average.
|
| Posted: 19 Oct 2007 17:31 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
|
Quote:
Friedman was a libertarian, but wasn't a supply-sider. You are essentially correct, Danny, although he gets lumped in with them often enough. There's a lot of overlap with these guys.
I will address your original post a little at a time, if you don't mind. You cite the unemployment numbers as a sign that supply-side economics don't work, if I'm understanding you correctly.
Let me lay some groundwork here. I have always had a problem with (and both parties do this) the part of the President's State of the Union where they throw out a bunch of numbers to prove that they are doing such a great job economically. Those numbers are massaged and tweaked and spun to present a favorable picture, regardless of the real situation. that's the nature of politics.They will say things like "and we created 47 gazillion jobs". Governments create neither jobs nor wealth. Government is at its best when it gets out of the way and lets business do what it does best. When times are good, the government can no more take credit for it than I can for the grass growing because I didn't cut it. In fact, often growth hapens despite government interference, which is a good tribute to the strength of capitalism. When times are bad, the government deserves little blame, unless they've been standing on the neck of industry with regulations and bureaucracy. So I disagree with the President pointing to those numbers to prove his brilliance and I disagree with you using them.
I don't think they are invalid numbers. I've never known you to give out false information, Danny, so I'll assume they are valid. They do however, only reflect those that aplied for benefits. Some of us, though frequently unemployed in our lives, usually don't apply for benefits, though we are probably not a large enough number to impact statistically. For the purposes for which they are usually used, they are probably as accurate a set of numbers as you could realistically gather.
The main problem I have with you using them is that they are only one part of a vast, complex picture. A real economy is in a constant state of rises and corrections with factors pulling it in different directions and constant motion. it's also a hard thing for a central authority to effectively steer. It doesn't always move as fast or as slow or as far as you think it will when you start. Depending on Congresses participation, a President's economics policies may or may not get fully implemented right away. While all the wheeling and dealing is going on, real companies are making real mistakes and having real sucesses. hrow in things like union negotiations or natural disasters or events overseas and it becomes a tumltuous affair indeed. The effects of a given policy may not show up for some time or not show up at all. That's why, though I generally agree with Reagans economic policies, I will not cite them as a panacea for all ills or give them more credit than I think they are due. Trying to be fair here. More later.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 19 Oct 2007 17:53 |
|
|
|
Captain America
|
|
|
Quote:
Government is at its best when it gets out of the way and lets business do what it does best
My problem with that statement is that what business does best is make money, and when you "get out of its way," the end result is often poor working conditions, environmental damage, inferior or dangerous products, and dishonest accounting.
Businesses need to be regulated, set to high standards and held accountable when they do not uphold those standards.
Outside of the scope of your argument, but an important point.
|
| Posted: 19 Oct 2007 18:42 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
Okay obviously I disagree. If what you're saying was the case, then we would probably be seeing more people going for help in times when he government is trying to help- not the reverse.
Either way- supply side economics doesn't magically invent jobs as is so often stated (though not nessecarilly by you preach).
There's a good discussion coming here, but i gotta head out of town. More much later...
Lets check into some more economic data.
|
| Posted: 19 Oct 2007 18:43 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
|
Whoops last post was to preach- sorry guys- gotta run!
|
| Posted: 21 Oct 2007 23:54 Last Edited By: Danny |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
|
Quote:
Those numbers are massaged and tweaked and spun to present a favorable picture, regardless of the real situation.
Not these numbers- they came from the US Department of Labor. We aren't gong to find a more bi-partisan measure.
Quote:
Some of us, though frequently unemployed in our lives, usually don't apply for benefits, though we are probably not a large enough number to impact statistically. Which means the unemployment rates are likely much higher. Either way, people sought more help from the government during times of Republican leadership. Like you, I feel the reasons are probably numerous.
Quote:
Governments create neither jobs nor wealth. Government is at its best when it gets out of the way and lets business do what it does best. But if this were the case- that chart would read differently. Reagan deregulated everything he could and increased military spending. If the common libertarian interpretation of FDR's terms were accurate- then the military buildup of the 80's and the privatization of everything would have led directly to 40's style employment. It didn't. It didn't even lead to a higher GDP average than during Carter's term or Clinton's terms.
The reason why is simple. As seen in the other charts, Reagan didn't cut spending. He kept spending about where it had been and shifted the flow of money in the direction of the wealthy. I've yet to come across data that suggested otherwise.
Had this brought up the GDP, I'd have less to complain about, but it didn't. The average GDP increase during Johnson's, Clinton's or even Carter's terms was higher than Reagan/Bush 41. Apparently, some government control DOES benefit our economy.
From the Bureau of National Economic Analysis
Of course, this is why no one has made a move to do away with the Federal Reserve. There will always be some control or attempt to control the economy. i say you can redistribute in numerous ways, but if you try to give those with the least amount of advantages a fighting chance- history is on your side. By no means do I think this has to amount to communism or government control over everything. The 90's were a very free market time, when moderate ideas tended to be the only things that passed. Consequently, the nation did quite well economically.
|
| Posted: 22 Oct 2007 15:09 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
Danny, I am in the middle of doing some independent research in order to get my brain around some of the numbers being discussed here in a hopes to be able address them half-way itelligently.
While doing my research I ran across a debate between Robert Reich and Stephen Moore. The transcript reads something like "Oh yeah, we created 47 gazillion jobs and shrank the deficit!"
"So what, we created 57 gazillion jobs, eliminated the defecit and gave away free ice cream!"
The ugly side of politics indeed. I will get back to you on this though, and if I get distracted by a shiny object, please feel free to call me on it.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 22 Oct 2007 15:36 |
|
|
|
Captain America
|
|
|
Stephen Moore may be one of the top five dumbest people on the planet.
|
| Posted: 22 Oct 2007 15:48 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
I didn't say I agreed with him, I actually know very little about him. I just thought the debate was interesting in a 'my dad can beat up your dad' kind of way.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 22 Oct 2007 15:51 |
|
|
|
Captain America
|
|
|
Wasn't trying to imply you were, but he plays that rhetorical tit-for-tat game – and not very well. I've watched him get eviscerated in just about every debate I've seen him … sometimes to the point I felt kinda sorry for him. Then he'd open his mouth again.
|
| Posted: 22 Oct 2007 16:12 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
OK, Danny, just some questions as I wade through all of this.(what can I say, I went to public school and columns of tiny numbers frighten me).. you point to the ridiculously high 9 +% unemeployment rate(actually 10.8 according to another source in Nov of 82)of in as proof against the merits of Reaganomics,if I'm understanding you correctly. So, to what factors do you attribute that rate's plummet to 5-ish by 1989 (5.0 in March of '89 according to some)? And what factor do you think the inflationary issues of the Carter presidency played in all this?
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 23 Oct 2007 21:52 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
Preach,
Glad you asked. I'm by no means an expert on these things and we're getting into theoretical territory- but at least this time we're arguing about actual numbers. Hopefully my previous posts will also help you see where I'm coming from.
My conclusion is Reganomics is flawed because it doesn't take into account the full range of possibility for the wealthy investing their tax cut windfall. There are a variety of directions in which this money can go.
I think this is what happens during the peaks of unemployment that occur when we don't invest in the middle class or working poor. (I'll answer your question more directly in a moment).
Where the money can go:
1.) Locked up in the bank. Some wealthy people are extremely intelligent with great educations, others might be dumb with great accountants, brokers and lawyers, still others just operating on common sense. Average that together, and you'll end up with a group of people smart enough not to invest in bear markets when times aren't great.
This is a part of what made the American wing of the global depression of the 30's such a seemingly intractable problem. Remember how things went for George Bailey? That was for the common investor- but the old man with older money was still okay. So were plenty of wealthy people. I had one grandfather whose family barely made it during this time and another who had the only swimming pool in town. The gap between rich and poor had hit an all time high.
This continued to be bad through Hoover's suggestion of "rugged individualism", until FDR unlocked the coffers of the wealthy, or stole from them to jump start the economy, depending on one's perspective. (Don't get too sad for the rich, they made even more money for the next 30 years).
2.) Foreign Direct Investment Some of those people will also have the resources to look for better deals worldwide. Haliburton has a lot of our tax dollars right now. For whatever reason, they elected to move their operation to Dubai late last year. Now they don't pay American taxes, nor reinvest in the American economy by supplying jobs. This is nothing new and in the 1980's- Foreign Direct Investment (or FDI) took off like never before as a means of producing goods more cheaply. These days it is known as outsourcing. The bad side of it is that it removes the tax base in the US and leaves people who paid taxes into a system that helped the company grow. Their products may get cheaper (Wal-Mart's emergence was around this time) but if they don't have jobs to pay for it- they break even at best.
3.) Bad Investment: Remember the kind words I had for the rich about two reasons ago? Well, they're not all that bright. Some of them will invest in shaky things and lose their @sses all in the space of one year. When you concentrate wealth fast in one place, the gains can be great, or the losses quite catastrophic. World Com and Enron did our economy no favors in this decade and the Savings and Loan bankruptcy did a similar thing in the 80's. Even W found a way to lose money in the 80's, when he couldn't find oil in Texas. Without job creation or after job destruction, the resources of a failed company must be sold back to people who can afford it- other companies, wealthy people and banks- usually at less than the resources are worth. At no point does the underclass benefit.
4.) Sound investment that leads to job creation. Of course, there is always the chance that the wealthy will reinvest this money in the economy, which will produce jobs. I think this did happen some of the time after the massive 1981 Reagan Tax cut, just not the majority of the time as they predicted. My theory is that such a means for increasing growth will still work- the economy isn't ALL politics, but it does make things somewhat unstable.
The alternative. You could call it "demand side economics", or just "economics" or the "new deal" or the "Great Society" or whatever one likes. No matter what one calls it, the alternative to supply side economics tend to lead to lower rates of unemployment and larger gains in the GDP. The gap between rich and poor is smaller, so maybe some people don't feel as rich, but as a nation- we collectively do better.
Notice the lines during the 60's and the 90's were nice smooth curves downward in unemployment. Here, a balanced budget and helpful programs eroded the joblessness a little at a time, to the point where almost no one was unemployed- or at least seeking unemployment benefits, despite increasing availability and presumably higher payments.
Quote:
And what factor do you think the inflationary issues of the Carter presidency played in all this?
Well, quote honestly, inflation is beyond my ability to explain. I know that Keynesians back in the day felt that moderate to high inflation was an appropriate trade off for low unemployment. But given that we've experienced every sort of inflation and still had good or bad economies independent of that- I tend to think the two are somewhat unrelated. In the 70's we had a slew of problems that all tied into our economic picture in one way or another. Inflation was the most hypothetical of all of these. People waited in line for gas, they knew their tax money was going toward paying for Vietnam or job programs for poor people, but I don't think they could calculate how the inflation hurt them personally. I do feel that it is somewhat of a disincentive to save- as one's money is worth less (theoretically) but as we see now, inflation or not- Americans spend like crazy and that has both its good and bad points.
Of course, Carter's term was rough- but given the oil shocks of the late 70's and completely paying off a war we didn't win- at a time in which we were no longer producing any oil here- he had his hands full. Somehow, we still did great in our GDP gains.
To me, that one is the most confusing, but I assume we just did better after we didn't have to waste our young talent in 'Nam. I wish I had a better answer for you here but I don't. I'm trying to read up on what Milton Freidman and Keynes said about this and to be honest, I don't think their explanations are any better than mine!
Quote:
So, to what factors do you attribute that rate's plummet to 5-ish by 1989 (5.0 in March of '89 according to some)?
But to succinctly answer your question- I think that the 81 tax cut sent money flying in all directions, but not much of it trickled down, at least not immediately.
Or maybe it was just that Reagan raised taxes again and again after 1981. I believe the biggest one's were in '84 and '87. This prompted George HW Bush to announce at the '88 Republican Convention that there would be "no new taxes", which turned out to be unsustainable given the national debt.
The tax money that was still being paid was, ironically, wasted on "Star Wars" and numerous other military (government) expenditures that didn't serve any purpose but to outspend the Russians*. In the case of a missile defense shield, I applaud the idea- but the technology never worked. This is crucial to making a big investment- few people buy cars that don't start.
During this time, the education system and public resources like roads, libraries and mental institutions crumbled. Consequently, many of us found ourselves living with a lot of traffic, uneducated kids and crazy homeless people. Not that Reagan was the sole factor here, but the 80's were particularly bad for increases in these problems. As the chart shows, they were also bad for unemployment.
*Some say the increased military spending contributed to the fall of the Soviet Union, which is another unsupported myth about the Gipper. If one truly believes Communism is flawed, then there wasn't any need to outspend them. In fact, us handing out tax dollars for weapons given to unstable people in other countries just led to the problems we face now- like in Iraq and Afghanistan. At the end of the day, a communist government has to be overthrown, because there's no other way for people to change their economic fortunes. It simply came to a head from 1989 to 1991 when everyone there was broke and angry. We might always compete with the Russians- we're starting to do so again.
|
| Posted: 24 Oct 2007 03:15 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
Such a well thought out answer deserves a well-thought out response. I will get back to you.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 13:24 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
|
Another question, Danny, just so we can agree on some common terminology. When you say Quote:
invest in the middle class or working poor what exactly do you mean by that?
And is your issue with a)supply side economics in theory as opposed to practice , or b) Reaganomics in particular? I think we can agree that Reagan's fiscal policy probably wasn't pure supply side, few adminstration policies are pure anything, there are just too many people involved with different visions of what ought to be.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 13:26 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
I appreciate your patience with me on this , Danny. What we're discussing is pretty big, and neither of us are experts. It's possible to get too bogged down in minutae as well as get caught up in too much abstractness.
I had another question about your second set of numbers, but I'll burn that bridge when I get there.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 16:25 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
Well- by middle class, I mean folks who are in the middle of the economic spectrum. As i discussed with Tim, I hesitate to put a number on it myself, though I realize it must be done. I told him I might not consider someone rich until they hit 500,000. I might consider on up to a million before taxation gets serious.
The reason is that you don't want to create, or at least want to smooth out that initial hump of taxation for people who ARE working hard to become rich. I wouldn't ever want to preclude someone from doing that. All I ask is that they put in their fair share into the country that supports them, and that share will be proportionately larger than someone working just as hard and living on the brink. Like I told Tim, this is the sort of number that ought to be worked on every year. It might already be.
By working poor, I mean people who are working but still aren't middle class. I might extend this definition to "could qualify for assistance, but don't", although plenty of people aren't eligible for assistance for one reason or another who should be.
A large group of these people are single income families, a lot of them single parents. We already have the earned income tax credit for these folks, and they tend not to pay taxes- other than in purchases depending on their state. I would also remove taxes from important supplies like food and medicine, though I would probably leave it on restaurants- especially fast food.
|
| Posted: 25 Oct 2007 16:31 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
Perhaps my question wasn't clear enough. How does one exactly 'invest' in the middle class and poor?
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 17:24 |
|
|
|
Registered User
Currently Offline
|
Posts: 247
Join Date: Aug 2007
|
No prob. I mean education grants, welfare to work programs, lowering their taxes (middle class) and home ownership incentives- all sorts of things.
These are of course, government programs, but by no means do they need to be wasteful. Americorps is a good example of a program in modern times that has worked out well. The basic idea is that college kids have their school loans forgiven by working for communities in trouble for a few years after college.
|
| Posted: 25 Oct 2007 17:36 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
OK, an investment is designed to provide a return. What return do you see on these types of programs, and how do we measure how effective they are versus the cost of them ? Is there such a mechanism in place? From what I understand , and I may be wrong, the default rate on government student loans is pretty high.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 17:41 |
|
|
|
Captain America
|
|
|
Well, if you cut manufacturing and starter-level white collar jobs, then schooling and job training programs are rendered mute.
|
| Posted: 25 Oct 2007 17:51 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
Well, that's getting a bit off topic, I was trying to make sure when Danny and I use the same terms we mean more or less the same thing as we wade through this.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
| Posted: 25 Oct 2007 17:52 |
|
|
|
Captain America
|
|
|
Referring to default student loans … I take it you don't think any of those programs are good?
|
| Posted: 25 Oct 2007 17:58 |
|
|
|
Registered User
Currently Offline
|
Posts: 1408
Join Date: Jul 2007
|
I was asking because I didn't know. I know we made sure my wife paid back hers.
__________________1 TIMOTHY 1
15 This is a faithful saying, and worthy of all acceptation, that Christ Jesus came into the world to save sinners; of whom I am chief.
|
|
