Why Biden/Harris will win

[homersapien 11,431]

2 minutes ago, SocialCircle said:

Do you mean facts like the deficit was indeed higher the day Obama left office than the day he entered office or facts like Trump has accomplished nothing with NK despite the fact some families finally got some bodies of their loved ones back or facts like the national debt more than doubled under Obama or facts like it was actually Obama who got passed and signed the 2009FY budget with the Dems. controlling both chambers? Or perhaps that it is easier to cut the deficit coming off an economic collapse that involved significant federal stimulus? 
 

 

Well to be specific,  in this case I was referring to:

Donald Trump stated on February 4, 2020:

"Years of economic decay are over" because Trump "reversed the failed economic policies of the previous administration."

 

But there's about about 20,000 more of such "facts" to choose from. 

 

https://www.washingtonpost.com/politics/2020/07/13/president-trump-has-made-more-than-20000-false-or-misleading-claims/

 

No doubt you believe them all.

[McLoofus 35,182]

Was it ever made clear what trump gave up in exchange for those remains from NK?

[AUDub 11,179]

20 minutes ago, SocialCircle said:

Do you mean facts like the deficit was indeed higher the day Obama left office than the day he entered office or facts like Trump has accomplished nothing with NK despite the fact some families finally got some bodies of their loved ones back or facts like the national debt more than doubled under Obama or facts like it was actually Obama who got passed and signed the 2009FY budget with the Dems. controlling both chambers? Or perhaps that it is easier to cut the deficit coming off an economic collapse that involved significant federal stimulus?

This is just getting obscene.

[SocialCircle 570]

2 hours ago, homersapien said:

Well to be specific,  in this case I was referring to:

Donald Trump stated on February 4, 2020:

"Years of economic decay are over" because Trump "reversed the failed economic policies of the previous administration."

 

But there's about about 20,000 more of such "facts" to choose from. 

 

https://www.washingtonpost.com/politics/2020/07/13/president-trump-has-made-more-than-20000-false-or-misleading-claims/

 

No doubt you believe them all.

I don’t care what Trump says and it isn’t relevant to this conversation. I’ve never once brought up anything Trump said in this entire thread. 

[SocialCircle 570]

2 hours ago, AUDub said:

This is just getting obscene.

All of the are facts and it isn’t even debatable. 

[Mikey 16,716]

11 hours ago, homersapien said:

After Solyndra Loss, U.S. Energy Loan Program Turning A Profit

Making other good loans is supposed to hide the fact that someone swiped 1/2 billion dollars of our money, and a goodly percentage of that half billion most likely went to buy the Obama's estate on Martha's Vineyard? That's funny!

[Brad_ATX 13,654]

@Mikey You ready to pay up now that Biden is officially the nominee?

[Mikey 16,716]

2 minutes ago, Brad_ATX said:

@Mikey You ready to pay up now that Biden is officially the nominee?

Yes! I'm delighted to do so. Post the mailing address to where you want the dollar sent and I'll put it in the mail tomorrow.

PS: Did Biden make a live acceptance speech or was it something previously recorded from his basement?

[Brad_ATX 13,654]

58 minutes ago, Mikey said:

Yes! I'm delighted to do so. Post the mailing address to where you want the dollar sent and I'll put it in the mail tomorrow.

PS: Did Biden make a live acceptance speech or was it something previously recorded from his basement?

It was live.

And make a donation to the Auburn University Department of Communication and Journalism.  I'll match up to $50.

Mostly I just think it's funny that you'll be donating to the future of the "fake news" media that you like to deride.

EDIT: After further review and seeing @bigbird's thread in the football forum, make your donation to this GoFundMe.  AU has enough money.

https://gf.me/u/yr2y5n

[bigbird 60,580]

3 hours ago, Brad_ATX said:

 

EDIT: After further review and seeing @bigbird's thread in the football forum, make your donation to this GoFundMe.  AU has enough money.

https://gf.me/u/yr2y5n

A reaction isn't enough. Thank you, my friend.

They are a very hard working family but they struggle to even achieve the "lower class" financial status, but they make up for it in love. They're such a tight knit, supportive and caring family.

Seeing him in the hospital and speaking with his dad, it hits pretty damn close to home. I just wish I could do more for them.

[McLoofus 35,182]

3 hours ago, bigbird said:

A reaction isn't enough. Thank you, my friend.

They are a very hard working family but they struggle to even achieve the "lower class" financial status, but they make up for it in love. They're such a tight knit, supportive and caring family.

Seeing him in the hospital and speaking with his dad, it hits pretty damn close to home. I just wish I could do more for them.

Wish I could give more, but it's been nudged over the $1,000 mark. Good luck and godspeed. 

[bigbird 60,580]

34 minutes ago, McLoofus said:

Wish I could give more, but it's been nudged over the $1,000 mark. Good luck and godspeed. 

I understand. You're too kind, thank you.

[Mikey 16,716]

8 hours ago, Brad_ATX said:

It was live.

And make a donation to the Auburn University Department of Communication and Journalism.  I'll match up to $50.

Mostly I just think it's funny that you'll be donating to the future of the "fake news" media that you like to deride.

EDIT: After further review and seeing @bigbird's thread in the football forum, make your donation to this GoFundMe.  AU has enough money.

https://gf.me/u/yr2y5n

Our wager was for one dollar. Donations in other amounts are a different thing, quite separate from the bet we made. You will have to excuse me for not making a one dollar donation through Go Fund Me. If you wish, I'll mail the dollar to you and you can do with it as you please. Otherwise, it'll go to the AU Dept. you mentioned above.

[Mikey 16,716]

@TitanTiger Why the facepalm? We are settling a one-dollar wager. Donations to various causes or in differing amounts are in no way related to the bet. Is that something that's hard to understand?

[TitanTiger 20,510]

3 minutes ago, Mikey said:

@TitanTiger Why the facepalm? We are settling a one-dollar wager. Donations to various causes or in differing amounts are in no way related to the bet. Is that something that's hard to understand?

It was a lighthearted bet.  He changed it to give to a good cause and you're straining gnats over it.  I just find it silly.

[Brad_ATX 13,654]

2 hours ago, Mikey said:

Our wager was for one dollar. Donations in other amounts are a different thing, quite separate from the bet we made. You will have to excuse me for not making a one dollar donation through Go Fund Me. If you wish, I'll mail the dollar to you and you can do with it as you please. Otherwise, it'll go to the AU Dept. you mentioned above.

 

1 hour ago, TitanTiger said:

It was a lighthearted bet.  He changed it to give to a good cause and you're straining gnats over it.  I just find it silly.

What Titan said.  I don't give two craps about a dollar.  It can't even buy me a coke at the gas station.  More or less, I was trying to bring attention to a good cause and hoping Mikey would do the right thing.  Guess not.  I'm still donating my $50.  I'd challenge others to donate what they can.

[McLoofus 35,182]

And the downward spiral into blatant indecency continues. Or likely more accurate that the facade of decency continues to be stripped away. Sad. 

[homersapien 11,431]

14 hours ago, Mikey said:

Making other good loans is supposed to hide the fact that someone swiped 1/2 billion dollars of our money, and a goodly percentage of that half billion most likely went to buy the Obama's estate on Martha's Vineyard? That's funny!

Stop lying.

No one "swiped 1/2 billion dollars".   It's not unusual for such a stimulus program to have winners and losers.  That's pretty much true for every program, government or private industry.  My point was that, on the whole, the program had positive results.  You focusing on one of it's failures doesn't change that.

And as a Trump supporter in particular, you shouldn't be making specious charges about Obama profiting from the presidency.  

Talk about living in a glass house and throwing stones! 

[homersapien 11,431]

19 hours ago, SocialCircle said:

All of the are facts and it isn’t even debatable. 

The "debate" disappeared after you demonstrated you didn't understand what it was about - trickle down economics.

[SocialCircle 570]

8 minutes ago, homersapien said:

The "debate" disappeared after you demonstrated you didn't understand what it was about - trickle down economics.

I perfectly understand supply side/free market economics and it works. As the company I work for had made more money the last 3 years we have gone from about 600 employees to about 750. My raises and bonuses have been increased and they are both great. Also, as more and more is spent here in our county over the last 3 years, the monthly SLOST for our school system has increased by 40-50%. It is really special to see what this extra money can do for these students in our school system. The real estate agents in town and the lawyers who handle the closings tell me they have never been busier or made more money than the last 2 years. So yes, I understand it perfectly well. And I will take that to the bank. 

[SocialCircle 570]

19 minutes ago, homersapien said:

Stop lying.

No one "swiped 1/2 billion dollars".   It's not unusual for such a stimulus program to have winners and losers.  That's pretty much true for every program, government or private industry.  My point was that, on the whole, the program had positive results.  You focusing on one of the failures doesn't change that.

And as a Trump supporter in particular, you shouldn't be making specious charges about Obama profiting from the presidency.  

Talk about living in a glass house and throwing stones! 

One difference is Obama frequently made disparaging remarks about “the rich.” Same with Bernie. 

[homersapien 11,431]

3 hours ago, SocialCircle said:

I perfectly understand supply side/free market economics and it works. As the company I work for had made more money the last 3 years we have gone from about 600 employees to about 750. My raises and bonuses have been increased and they are both great. Also, as more and more is spent here in our county over the last 3 years, the monthly SLOST for our school system has increased by 40-50%. It is really special to see what this extra money can do for these students in our school system. The real estate agents in town and the lawyers who handle the closings tell me they have never been busier or made more money than the last 2 years. So yes, I understand it perfectly well. And I will take that to the bank. 

I doubt it.  You haven't even mentioned taxes in this discussion which is the essence of "supply side" economics.

You are obviously conflating it with "free market" economics (see above).  They aren't the same thing.

Also, I need to point out that given the timeline you present above - "the last 3 years" - the economic environment you are so proud of was created by Obama.

Lastly, the measure of any economic policy is how good it's been for the country.  I have continued to profit as an individual because I became relatively wealthy back in the early 2000's (by living beneath my means and investing early and aggressively).

But I don't represent the economic health of the country as a whole, where economic disparity has worsened over the last few decades largely thanks to "trickle down" economic theory. 

[homersapien 11,431]

https://www.latimes.com/business/story/2019-08-19/column-trickle-down-is-a-lie

Column: Trickle-down theory is a monstrous lie intended to justify the rich getting richer

By David LazarusBusiness Columnist 

Aug. 20, 2019

 

One of the biggest lies foisted on the American people is that as rich people get richer, we all benefit — the so-called trickle-down theory.

For decades, working families have been told not to worry about the growing wealth gap between the nation’s haves and have-nots. A rising tide lifts all boats, we’ve been told with encouraging smiles and pats on the back.

The magnitude of the deception borders on monstrous.

William Darity, a professor of public policy at Duke University, said it’s “nonsensical” to think that greater wealth for the rich translates to improved fortunes for everyone else.

“Otherwise we would not have observed such an obscene increase in the degree of income inequality that has restored the magnitude of levels that existed on the eve of the Great Depression,” he told me.

“I have not seen anyone make a serious claim for a trickle-down effect with respect to wealth.”

Put simply, there is no empirical evidence — none whatsoever — that trickle-down economics delivers as promised, bringing more jobs, higher pay and better conditions to millions of people.

The reality is that as the rich get richer, the rich get richer, full stop. They buy more houses and cars and boats and stuff.

Yes, that has a positive impact on makers of luxury goods. But it’s not in any way the shared prosperity implicit in the trickle-down pledge.

The latest indicator that things are terribly out of whack came in a report last week from the Economic Policy Institute, which found that compensation for American chief executives increased by 940% from 1978 to 2018, while pay for the average worker rose by a miserable 12% over the same 40-year period.

Average pay for CEOs of the 350 biggest U.S. companies hit $17.2 million last year, the researchers found.

Put another way, compensation for CEOs is now 278 times greater than for ordinary workers. That’s a stratospherically larger income gap than the 20-to-1 ratio in 1965.

“This escalation of CEO compensation, and of executive compensation more generally, has fueled the growth of top 1% and top 0.1% incomes, leaving less of the fruits of economic growth for ordinary workers and widening the gap between very high earners and the bottom 90%,” the report concluded.

Much of the blame for the trickle-down lie goes to conservative economist Arthur Laffer, godfather of “supply-side” economics, a.k.a. “Reaganomics.” He argued, using an easy-to-understand graph — the Laffer curve — that as tax rates go down, government revenue goes up.

This, of course, is magical thinking. Yet it has served as the intellectual basis of virtually all Republican economic policies since the 1970s, and was the primary justification for the party’s most recent tax cuts for wealthy corporations and individuals.

On Sunday, President Trump dismissed growing speculation about a recession by insisting his tax cuts, and the miracle of trickle-down prosperity, will keep the economy humming.

“Consumers are rich,” he said. “I gave a tremendous tax cut and they’re loaded up with money.”

In fact, consumer sentiment fell this month to the lowest level of the year.

As for the tax cuts, the Treasury Department reported last week that the U.S. budget deficit soared by 27% to $867 billion over the first 10 months of the fiscal year.

That was due in no small part to Trump’s tax cuts doing not what Laffer predicted but what all sensible economists said would happen: Government revenue fell while spending increased.

The deficit is projected to top $1 trillion for the entire fiscal year, which ends Sept. 30. The last time that happened was in the aftermath of the Great Recession.

On a smaller level, Republicans turned the state of Kansas into a laboratory for trickle-down economics, with the goal being to prove conclusively that if you aggressively cut taxes, the economy will rev like a mighty engine.

What happened, needless to say, is that revenue shrank, the state’s bond rating plummeted, and draconian cuts were made to schools and infrastructure. The Republican-controlled state Legislature finally rolled back the tax cuts in 2017 and started scrounging to close a $900-million budget shortfall.

“A healthy economy depends on a functioning government,” said Owen Zidar, an associate professor of economics and public affairs at Princeton University.

“Not being able to finance a quality education system and other priorities can lead to lower economic performance when tax revenues are too low,” he said. “At current tax rates, there’s no credible evidence that tax cuts pay for themselves.”

Economists say the wealth gap in American society is now the greatest since the Gilded Age of the late 19th century, when the richest 10% owned roughly three-quarters of the nation’s wealth, and the bottom 40% had virtually nothing.

It’s currently estimated that the richest 200,000 families own about as much as the bottom 90% of households combined.

How do you fix that? Conservatives would say you should cut taxes so you’d get more money into the hands of more people.

White House economic advisor Larry Kudlow told Fox News on Sunday this is precisely what the Trump administration is considering.

“Let’s let people keep more of what they earn,” he said. “That’s the supply side of the Laffer curve. We believe in that.”

Belief is required because there’s no evidence to support the idea.

What the evidence does show is that large-scale tax cuts lead to more debt, deficits, budget cuts and economic uncertainty as a greater share of financial resources is devoted to paying off interest on loans from our trading partners.

UC Berkeley’s Haas Institute for a Fair and Inclusive Society has some smarter suggestions:

• Raise the minimum wage, which could help nearly 4.6 million people out of poverty.
• Expand the earned income tax credit, which could lift roughly 4.7 million children above the poverty line.

• Make the tax code more progressive, which is to say, have the tax burden fall more heavily on those who can afford it, particularly through a higher levy on capital gains.

That last proposal regarding progressivity is the most important. As the rich have accumulated a greater share of the nation’s wealth, they’ve simultaneously succeeded in lowering their tax obligations.

From 1940 to 1980, the tax rate for the super-rich never dropped below 70%. For much of the 1950s, it was above 90% — although, like today, most rich people used a variety of techniques to lower their tax bills, such as tax shelters and offshore accounts.

The top tax rate is now 37%. However, few if any billionaires pay even that much.

For example, Trump, while enjoying the life of a jet-setting businessman, claimed $1.17 billion in losses from 1985 to 1994, which allowed him to skip income taxes for eight of those 10 years, according to IRS tax transcripts obtained by the New York Times.

In June, Trump awarded trickle-down proponent Laffer the Presidential Medal of Freedom, the nation’s highest civilian honor.

Trump praised Laffer’s “brilliant theory,” and said the value of trickle-down economics had been proved “over and over again.”

It hasn’t. Just the opposite.

Over and over again.

 

 

[homersapien 11,431]

https://www.americanprogress.org/issues/economy/reports/2017/08/24/437625/trickle-tax-cuts-dont-create-jobs/

Trickle-Down Tax Cuts Don’t Create Jobs

By Seth Hanlon and Alexandra Thornton August 24, 2017

Read the full series of fact sheets here. 

President Donald Trump and House Republicans have proposed trillions of dollars in tax cuts, predominantly for high-income individuals and corporations. These tax cuts would come at the expense of middle-class families’ economic security and investments in our economy, such as education, scientific research, and infrastructure. While the administration and House Republicans plan to advance their agenda through Congress this fall, public opinion is crystal clear that the American people do not support the tradeoff between tax cuts for millionaires and economic security for working families.¹ Trump and House Republicans are therefore taking a page out of an old playbook: claiming that tax cuts will trickle down to working families in the form of stronger economic growth. But recent history and an abundance of economic research show that trickle-down tax cuts don’t create growth or jobs; they lead only to widening inequality between the top 1 percent of income earners and everyone else.²

Trickle-down tax cuts have consistently failed to benefit working families

The past quarter century has tested the supply-side theory that top-bracket tax cuts would boost economic growth and jobs. This theory has decidedly failed.

• In 1993, President Bill Clinton raised taxes on top earners from 31 percent to 39.6 percent. Conservatives predicted disaster;³ instead, the economy boomed. 23 million jobs were created and the economy grew for 32 straight quarters in what was then the longest expansion in history.⁴
• By contrast, in 2001 and 2003, President George W. Bush cut income taxes substantially, lowering the top rate to 35 percent while also lowering top rates on capital gains and dividends. Conservatives maintained that the tax cuts would turbocharge economic growth; in fact, conservative think tank The Heritage Foundation predicted that growth would be so strong that the United States would entirely pay off its debt by 2010.⁵ Instead, the ensuing years saw weak growth, followed by the 2008 economic collapse. And as economist Danny Yagan has found, the steep cuts in dividend tax rates signed into law by President Bush in 2003 did not increase corporate investment or worker pay.⁶
• The Bush-era tax rates stayed in place through 2012, but at the end of that year, President Barack Obama struck a deal to restore the 39.6 percent top tax rate and raise the tax rates on capital gains and dividends. Again, many conservatives predicted doomsday.⁷ However, the economy grew steadily, and the expansion is still continuing.

As Figure 1 shows, job growth has been much stronger following the two most recent increases in the top tax rate. Given that there are innumerable factors behind how the economy performs, this recent history certainly does not prove that raising taxes on the rich causes the economy to grow or that cutting taxes on the rich causes it to lag. It does, however, provide powerful evidence refuting the claims made by the proponents of trickle-down tax cuts.

Conservatives often point to President Ronald Reagan’s 1981 tax cuts as evidence that supply-side tax cuts accelerate economic growth.⁸ In fact, despite the legend, there is little evidence that the personal income tax cuts enacted by President Reagan in 1981 meaningfully boosted the economy; as research by Reagan’s own chief economist has found, the so-called Reagan recovery of the early 1980s was driven by monetary policy, not tax cuts.⁹

State experiences can guide federal policymakers

Kansas’ supply-side experiment illustrates the dangers of trickle-down tax cuts, while California has proven that making the wealthy pay their fair share is consistent with strong growth. In 2012, in what Gov. Sam Brownback (R-KS) called a “real live experiment” in supply-side tax policy, Kansas approved major tax cuts skewed toward the top earners and business owners.¹⁰ That same year, California raised taxes on the highest earners—singles earning more than $250,000 per year and couples earning more than $500,000—making the top-bracket income tax rates the highest in the nation.¹¹ Since then, California has enjoyed among the strongest economic growth rates of any state, while Kansas has lagged behind its neighbors, falling below average nationally in economic growth and job creation.¹² Kansas’ tax cuts have severely worsened the state’s fiscal situation, resulting in deep cuts to education and other state services.¹³

Reducing top marginal tax rates can harm growth

As economist Jared Bernstein has found, the U.S. experience since World War II shows no correlation between the top marginal tax rate and per capita economic growth—nor between the top marginal tax rate and growth in employment, capital investment, productivity, or pretax median family incomes.¹⁴ That is, cutting taxes at the top does not result in faster growth or rising living standards. Similarly, the nonpartisan Congressional Research Service (CRS), examining the U.S. experience since 1947, found no association between the top marginal income or capital gains rates and per capita growth. As CRS determined, “The top tax rates appear to have little or no relation to the size of the economic pie,” but tax policy “could be related to how the economic pie is sliced.”¹⁵ Indeed, top-bracket tax rates are correlated with growth in income inequality.¹⁶

The Brookings Institution’s William Gale and Dartmouth College’s Andrew Samwick comprehensively reviewed the economic literature on tax cuts and growth, concluding that tax cuts are unlikely to substantially boost growth and that tax cuts that increase deficits can harm growth.¹⁷

As with the significant cuts in domestic programs since 2011, the deficits resulting from unpaid-for tax cuts will undoubtedly be used to justify cutting programs that invest in the economy and support working families, harming our long-term prospects in the process.¹⁸ Federal investments in education, research, and infrastructure all create jobs and grow the economy over the long term.¹⁹ Researchers have found that Medicaid, nutrition assistance, and environmental protection all improve health outcomes and in turn increase productivity.²⁰ Programs that improve the economic security of low-income children—such as nutrition assistance, housing subsidies, and tax credits like the Earned Income Tax Credit—raise children’s educational attainment and future earnings.²¹ For these reasons, tax cuts that threaten critical investments undermine the goal of broad-based prosperity.

Seth Hanlon is a senior fellow at the Center for American Progress. Alexandra Thornton is senior director for Tax Policy at the Center.

Endnotes

1. Memo from Jeffrey Pollock, Geoff Garin, Mark Mellman, Michael Bloomfield, and Bryan Bennett, “Progressives Have Public Opinion on Their Side in the Upcoming Tax Fight,” August 14, 2017, available at https://notonepenny.org/wp-content/uploads/2017/08/Progressives-Have-Public-Opinion-on-Their-Side-in-the-Upcoming-Tax-Fight-v1_0-1-1.pdf. ↩
2. For further resources on taxes and the economy, see Harry Stein, “Stop Cutting Taxes for Corporations and the Wealthy” (Washington: Center for American Progress, 2017), available at https://www.americanprogress.org/issues/economy/reports/2017/04/10/430161/stop-cutting-taxes-corporations-wealthy; Center on Budget and Policy Priorities, “Tax Cuts for the Rich Aren’t an Economic Panacea — and Could Hurt Growth” (2017), available at https://www.cbpp.org/research/federal-tax/tax-cuts-for-the-rich-arent-an-economic-panacea-and-could-hurt-growth; William G. Gale and Andrew A. Samwick, “Effects of Income Tax Changes on Economic Growth” (Washington: Brookings Institution, 2016), available at https://www.brookings.edu/wp-content/uploads/2016/07/09_Effects_Income_Tax_Changes_Economic_Growth_Gale_Samwick_.pdf. ↩
3. Pat Garofalo, “FLASHBACK: In 1993, GOP Warned That Clinton’s Tax Plan Would ‘Kill Jobs,’ ‘Kill the Current Recovery,’” ThinkProgress, August 10, 2010, available at https://thinkprogress.org/flashback-in-1993-gop-warned-that-clintons-tax-plan-would-kill-jobs-kill-the-current-recovery-96adb3663484. ↩
4. Center for American Progress, “Power of Progressive Economics: The Clinton Years” (2011), available at https://www.americanprogress.org/issues/economy/reports/2011/10/28/10405/power-of-progressive-economics-the-clinton-years. ↩
5. Rob Wile, “About That Time The Heritage Foundation Said the Bush Tax Cuts Would Pay Off the National Debt by 2010,” Business Insider, November 19, 2012, available at http://www.businessinsider.com/about-that-time-the-heritage-foundation-said-the-bush-tax-cuts-would-pay-off-the-natioanl-debt-by-2010-2012-11. ↩
6. Danny Yagan, “Capital Tax Reform and the Real Economy: The Effects of the 2003 Dividend Tax Cut,” American Economic Review 105 (12) (2015): 3531–3563, available at https://eml.berkeley.edu/~yagan/DividendTax.pdf. ↩
7. Then-House Speaker John Boehner, “Speaker Boehner Calls for Bipartisan Action to Avert the Fiscal Cliff,” YouTube, November 7, 2012, available at; Paul Ryan, “The President’s Tax Plan Will Cost Jobs,” Press release, October 2, 2012, available at: http://www.presidency.ucsb.edu/ws/index.php?pid=102981. ↩
8. Glenn Kessler, “Rand Paul’s claim that Reagan’s tax cuts produced ‘more revenue’ and ‘tens of millions of jobs,’” The Washington Post, April 10, 2015, available at https://www.washingtonpost.com/news/fact-checker/wp/2015/04/10/rand-pauls-claim-that-reagans-tax-cuts-produced-more-revenue-and-tens-of-millions-of-jobs/?utm_term=.e8e7978a3c37; Jeremy Holden, “Hayes retells myth that Reagan ended recession with tax cuts,” Media Matters for America, August 2, 2010, available at https://www.mediamatters.org/research/2010/08/02/hayes-retells-myth-that-reagan-ended-recession/168646. ↩
9. Gale and Samwick, “Effects of Income Tax Changes on Economic Growth; Martin Feldstein and Douglas W. Elmendorf, “Budget Deficits, Tax Incentives, and Inflation: A Surprising Lesson from the 1983-1984 Recovery.” In Lawrence H. Summers, ed., Tax Policy and the Economy, vol. 3 (Cambridge: MIT Press, 1989), available at http://www.nber.org/chapters/c10943.pdf; Feldstein, “Supply Side Economics: Old Truths and New Claims.” Working Paper 1792 (National Bureau of Economic Research, 1986), available at http://www.nber.org/papers/w1792. ↩
10. Scott Rothschild, “Brownback gets heat for ‘real live experiment’ comment on tax cuts,” Lawrence Journal-World, June 19, 2012, available at http://www2.ljworld.com/news/2012/jun/19/brownback-gets-heat-real-live-experiment-comment-t. ↩
11. Jessica Calefati and Josh Richman, “Proposition 30: A year later, California schools seeing benefits of tax measure,” The Mercury News, November 2, 2013, available at http://www.mercurynews.com/2013/11/02/proposition-30-a-year-later-california-schools-seeing-benefits-of-tax-measure/; Tax Policy Center, “State Individual Income Tax Rates 2000-2017” (2017), available at http://www.taxpolicycenter.org/statistics/state-individual-income-tax-rates-2000-2017. ↩
12. Center on Budget and Policy Priorities, “GOP Tax Plans Would Emulate Failed Kansas Experiment” (2017), available at http://www.cbpp.org/research/federal-tax/gop-tax-plans-would-emulate-failed-kansas-experiment; Greg Leiserson, “It’s no surprise that the Kansas tax cut experiment failed to create jobs,” Washington Center for Equitable Growth, June 15, 2017, available at http://equitablegrowth.org/research-analysis/its-no-surprise-that-the-kansas-tax-cut-experiment-failed-to-create-jobs/; Matthew A. Winkler, “California Leads U.S. Economy, Away From Trump,” Bloomberg, May 10, 2017, available at https://www.bloomberg.com/view/articles/2017-05-10/california-leads-u-s-economy-away-from-trump. ↩
13. Mitch Smith and Julie Bosman, “Kansas Supreme Court Says State Education Spending Is Too Low, The New York Times, March 2, 2017, available at https://www.nytimes.com/2017/03/02/us/kansas-supreme-court-school-spending.html; Rick Seltzer, “What’s the Matter With Kansas Budget Cuts?”, Inside Higher Ed, May 23, 2016, available at https://www.insidehighered.com/news/2016/05/23/kansas-cuts-criticized-hurting-large-research-universities. ↩
14. Center on Budget and Policy Priorities, “Testimony of Jared Bernstein, Senior Fellow, Before the Joint Economic Committee” (2016), available at https://www.jec.senate.gov/public/_cache/files/440d3c24-ee1d-4d72-87b3-d07d954fc19c/bernstein-testimony-for-jec-4-20-16.pdf; Center on Budget and Policy Priorities, “Tax Cuts for the Rich Aren’t an Economic Panacea — and Could Hurt Growth”; Center on Budget and Policy Priorities, “Large Job Growth Unlikely to Follow Tax Cuts for the Rich and Corporations,” June 9, 2017, available at https://www.cbpp.org/research/federal-tax/large-job-growth-unlikely-to-follow-tax-cuts-for-the-rich-and-corporations. ↩
15. Thomas L. Hungerford, “Taxes and the Economy: An Economic Analysis of the Top Tax Rates Since 1945” (Washington: Congressional Research Service, 2012), available at https://fas.org/sgp/crs/misc/R42729.pdf. ↩
16. Thomas Piketty, Emmanuel Saez, and Stefanie Stantcheva, “Optimal Taxation of Top Labor Incomes: A Tale of Three Elasticities.” Working Paper 17616 (The National Bureau of Economic Research, 2011), available at http://www.nber.org/papers/w17616; Hungerford, “Taxes and the Economy.” ↩
17. Gale and Samwick, “Effects of Income Tax Changes on Economic Growth.” ↩
18. Since 2010, nondefense, or discretionary, programs have been cut by 13 percent in real terms—adjusted for inflation—and by 18 percent when adjusted for inflation and population growth. See David Reich and Chloe Cho, “Unmet Needs and the Squeeze on Appropriations” (Washington: Center on Budget and Policy Priorities, 2017), available at https://www.cbpp.org/research/federal-budget/unmet-needs-and-the-squeeze-on-appropriations. ↩
19. Congressional Budget Office, “The Macroeconomic and Budgetary Effects of Federal Investment” (2016), available at https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/51628-Federal_Investment.pdf. ↩
20. Hilary Hoynes, Diane Whitmore Schanzenbach, and Douglas Almond, “Long-Run Impacts of Childhood Access to the Safety Net,” American Economic Review 106 (4) (2016): 903–934, available at https://www.aeaweb.org/articles?id=10.1257/aer.20130375; Adam Isen, Maya Rossin-Slater, and W. Reed Walker, “Every Breath You Take—Every Dollar You’ll Make: The Long-Term Consequences of the Clean Air Act of 1970.” Working Paper 19858 (National Bureau of Economic Research, 2014), available at http://www.nber.org/papers/w19858; David W. Brown, Amanda E. Kowalski, and Ithai Z. Lurie, “Medicaid as an Investment in Children: What is the Long-Term Impact on Tax Receipts?”. Working Paper 20835 (National Bureau of Economic Research, 2015), available at http://www.nber.org/papers/w20835. ↩
21. Arloc Sherman and Tazra Mitchell, “Economic Security Programs Help Low-Income Children Succeed Over Long Term, Many Studies Find” (Washington: Center on Budget and Policy Priorities, 2017), available at https://www.cbpp.org/research/poverty-and-inequality/economic-security-programs-help-low-income-children-succeed-over. ↩

 

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https://news.utexas.edu/2019/03/14/we-need-to-move-on-from-supply-side-economics/

We Need To Move On From Supply-Side Economics

By: Moris Simson

Mar 14, 2019

 

In a Washington Post op-ed piece dated March 4, Lawrence Summers, one of the most deliberative and experienced economists, issued dire warnings on the risks associated with Modern Monetary Theory, a new school of thought.

It proposes that in an era of low interest rates, central banks could finance increased government spending by increasing money supply to stimulate economic growth or protect against a recession.

The warnings were directed at the extreme or asymptotic conditions of the theory. But, while it was a valid idea, the article disappointed by not expanding on why, when or how the theory could be practicable or useful.

Of course, stretched-out, abused and misused Modern Monetary Theory is silly and will lead to both increased inflation and currency depreciation. But this is like saying “alcohol will destroy mankind” without realizing that used in moderation and only by responsible people, it might have beneficial and enjoyable effects.

Also, directly comparing it to supply-side economics can be confusing. The former deals with central bank monetary policy while the latter, associated with the still unproven Laffer-curve theory — where tax cuts would pay for themselves by promoting growth — deals with fiscal policy. Two totally different kinds of policies that could each be economically beneficial when pursued in moderation, but damaging when misused.

The legacy of supply-side economics is easy to see. Repeatedly overused tax cuts produced larger budget deficits which accumulated over the past 20 years to unsustainable levels. The U.S. public debt is now more than $22 trillion, galloping at a faster growth rate than that of the GDP.

Just recently the Bureau of Economic Analysis came out with its first-cut GDP growth numbers. After unprecedented tax cuts more than $2 trillion, the economy grew at 2.9 percent in 2018 while producing another budget deficit approaching $1 trillion. By comparison, the U.S. economy had also grown by the same 2.9 percent in 2015 but with a deficit about half as large and without tax cuts taking the national debt to unwelcome heights..

When will economists and politicians admit that George H.W. Bush was right when he called misguided overreliance on tax cuts “voodoo economics”?

It seems reasonable therefore that before we consider which monetary theory to embrace, we should first extricate ourselves from what has been a demonstrably misguided mindset of fiscal policy, without falling in the mental traps of right vs. left wing classifications.

As to monetary policy, without dwelling on the merits of modern versus classic monetary theories, the time has also come to reduce the reliance on the Federal Reserve to sustain America’s prosperity.

The latter results from other forms of proactive policies, focused on productivity gains by boosting the value and reach of a nation’s human capital versus the shuffling of interest rates or money supply. Laissez-faire economics is a lazy man’s sport, not the champion’s approach to global competitiveness.

The good news is that none of this is unknown to the Fed, America’s central bank. It would be surprising if Alan Greenspan, Ben Bernanke, Janet Yellen or Jerome Powell thinks otherwise.

If the Fed thinks we can finance increased infrastructure or public-works spending (i.e. constructive, accretive investments) through increased money supply without sacrificing the value of the dollar or inviting a spike in inflation, they may be more accommodating. But they will have to fit in a grander, bolder vision articulated by Congress that should form the basis to revise the Fed’s new mandate.

What will that revised monetary policy be called then? It doesn’t matter as long as it is done in tandem with prudent fiscal policies, both pushing in the same direction versus one sabotaging the other.

Simply put, the days of burdening the Fed with supply-side economics (i.e. fiscal follies) are over. The question is what will we have instead in a decelerating economy where thoughtful policy leadership has never been more critical since the 1950s.