Why Tax Rate Reductions Are More Stimulative Than Rebates: Lessons from 2001 and 2003

[shagdrum]

I really don't like to be spoon fed anything by either side. I do like to look at things for myself. Here, it is easy -numbers are readily available. Rather than use any 'group' such as Heritage or Brookings, why not start by looking at some numbers yourself? I can then see going to some biased source after wards and seeing what they say about it. But, when you don't have an independent baseline to judge anything on, how are you going to know whether what they are touting is even close to being correct? Shag, you might have a tendency to 'believe' Heritage while I might have positive leanings towards Brookings, but what is wrong with a little independent thought?

So do you have ADD or are you just being dishonest?

If you really want to to not be "spoon fed anything by either side", then I linked to the numbers originally published by the government for the various years in question in post #35.

Of course you are smart enough to realized that the numbers are hard to analyze in and of themselves even for someone who has the time to do that; most people are not statisticians. Any working american is going to have to turn to a secondary source.

What you are clearly doing is dishonestly and decietfully attempting to raise the burden of proof by demanding primary, "unbiased" sources.

You have to use secondary sources so you must look at their credibility to determine if what they say can be trusted. Seeing as you cannot win that argument, you are wanting to throw all secondary sources out. Sorry, despite your best efforts, Heritage is credible.

You are also assuming that any secondary source will mischaracterize the information. That assumption alone makes your conclusions in the quoted section fallacious non sequiters.

But if you truely believed that assumption, then you would not be posting at all in this forum, because we all have very strong biases and are really not in any way primary sources. You are clearly still on a crusade to get Heritage thrown out of the discussion by any means necessary.

And your line about not wanting to be "spoon fed anything by either side" and that you "like to think for yourself" is laughable. You clearly accept most any liberal talking point without first examining it's credibility. The only thought you ever seem to apply is in the defense of those mindless (and logically indefensible) talking points. If you wanna demonstrate that you "like to think for yourself" then how come you never seem to apply any critical thought to the talking points before you accept them?

That is one of the big differences between conservatives and liberals. Liberals accept illogical talking points without examination and never even seem to comprehend true conservative counterpoints (only strawman mischaracterizations spread by other liberals). However conservatives and other non leftists (most of which where liberals, or more liberal, in their younger days) have reasonably considered both the liberal talking point and the conservative counter and, after applying some critical thought, rejected the liberal one, and usually accepted the conservative point.

You are a fool if you take any hard position without first understanding the issue and applying critical thought to the various positions attached to that issue. Yet that is clearly what you (and most liberal voters) do constantly.

And yes, you do have to compare FDRs numbers to something - otherwise how do you know if they are to be considered a success or a failure?

I stand by my statement, You don't need to compare the two presidencies to determine what the original subject of this thread is; the failure of stimulus spending.

FDR's numbers cover the highest unemployment recorded (by any standard) in US history! By implication, it is compared to all other unemployment levels recorded throughout US history. To single out Reagan is unneccessary and, unless you can give some reasonable explaination for making that specific comparison (and you haven't yet), dishonest.

Reagan never pushed any type of spending stimulus, so to compare his record is to make a false analogy, as the subject of this is thread is the effect that a government spending stimulus has on the economy. There never was any spending stimulus under Reagan. Any attempt by you to say there was some sort of spending stimulus (and you have done so before) is a dishonest mischaracterization, and you know it.

Oh, and if you look I am using only FDRs numbers from 1933 to 1940, before our involvement and build up for the war. And, certainly Reagan was building up for a war during most of his administration, not one that was ever fought - but the build up was there.

FDR was building up for war long before we entered WWII. When we officially declared war, instituted the draft and started rationing, that was when we effectively created a war economy. Reagan never had that.

Ah, yes, look at post #41 (your post) in your first quote that you pulled from my post #40 "Do you have some other ways we should be looking at this data?" my words... I was really interested in other ways to slice and dice this...

Yes, look at post number 40....You still tie it back to Heritage and anyone who reads this thread can clearly see what you are doing. Trying to spin it only hurts your credibility even more.

In post #36, you turned on a dime from trying to smear and marginalize Heritage through their representation of the New Deal and it's effects on umemployment to trying to smear and marginalize Heritage through Reagan and comparing the two.

You really want to get Heritage thrown out, and are willing to throw out all secondary sources to do that. Is your ego really that big? Can you really just not admit that you were wrong about Heritage and it's reporting of unemployment during the great depression?

Or are you simply working to muddy the waters enough so that no conclusion can be drawn about the effect the New Deal had on unemployment?

Either way, please keep posting as you are further proving my point that liberals cannot argue accept through dishonesty, deciet and/or smears.

Thanks again.

 

[Calabrio]

None of these number support any of the myths around FDR.
It doesn't matter who's figures you use. Getting bogged down in the figures is cover for avoiding the substance of the issue.

And foxpaws, I responded to you, even putting some of the direct questions in bold- just to make it easier for you to follow. Not being bossy, just keeping things clear.

 

[foxpaws]

Because of basic economics. There are cycles, there are corrections.
You don't need a time machine to realize that natural economies will eventual correct themselves. While it's not instantaneous, and not always politically expediant, it does happen. And it takes less than a decade for it to happen, provided the government doesn't interject itself and interfere with the process. For example, by setting wage freezes that inhibit hiring, or tax policies, or trade restrictions.

What was ‘cyclic’ about the Great Depression? Have we seen another economic downturn that was of the same scope and severity as the Depression? I know that recessions are cyclic, but since we have had only one ‘great depression’ how can you say that it is cyclic. According to the Oxford History of the United States: From this time, too, it began to be clear that this depression was not just another cyclic valley, but a historic watershed, something vastly greater in scale and more portentous in its implications than anything that had gone on before.

And since we haven’t had any downturns in the economy that would be comparable, how would you know that it would take less than a decade for a complete turnaround to happen?

Now for the questions:
Let me ask you a direct question first, what do you think caused the "Great Depression?"
Well, obviously not ‘one’ thing…
Poor people. By 1929 (note - before the crash) more than 1/2 of the ‘families’ in America were living at or below the poverty line. Compare that to about 14 percent of people today live at or below the poverty line. This made them too poor to purchase goods, and too poor to pay off their debt. With markets dwindling, companies had to lay off thousands and thousands of workers, creating even more poor people.
Farm failures. Long before 1929 American farms were facing difficult times. At that time the farm economy was a very vital segment of the American economy. They were producing too much, and the prices were falling. Also, during the depression the Dust Bowl devastated the economy in the Great Plains, further taking the economy down.
Bank Failures. One of the classic culprits. Small banks, in those same areas hit hard by farm failures had overextended themselves, and weren’t enjoying the prosperity of the banks in the larger cities during the 20s. They had borrowed money from the large banks and by the late 1920s were defaulting on those loans. Also the large banks had been making big loans to foreign countries after WWI – so those countries could pay off the debt caused by the war. But, with the money supply drying up because the small banks were defaulting on their loans, the big banks quit loaning money to Europe. European nations in turn stopped making their payments on the outstanding loans during the last couple years in the 20s. The big banks were pinched on both sides. By 1930-31 many banks were going bankrupt, causing depositors to lose faith in the banking system. This caused panic and ‘runs on the banks’. The combinations of closings and panics basically shut down the banking system for a while.
The market crashed. Because the market was so ‘bullish’ during the 20s more and more people wanted to get in on it. People were buying ‘on margin’ because they could make money quick, without a big investment while the market was soaring. Borrow a little, buy the stock, sell it while it is high, pay off the debt, and pocket the profit. Fine as long as the market was going up, bad when it crashed. Suddenly all those ‘margin’ loans had to be paid, and there wasn’t any profit to pay them with. Once again – people had borrowed money from the bank for the ‘margin’ purchases, and they defaulted on those loans when the market crashed. Once again, leaving the banks with no recourse.

Do you think it was made more severe by the decisions of Hoover and the Congress? And are there any policies in particular that they imposed, or failed to impose, that you think made the problem worse? I believe mostly Hoover did too little, too late regarding the banks. The banks obviously needed help, and quickly. By the time the Reconstruction Finance Corporation was up and running, it was far too late to help the banks, and the economy then couldn’t stem the mass unemployment that was to follow after the failure of the banks. It is the underlying reason why Bush/Paulson tried to move quickly to help out the banks last year. Many economists point to the bank failures as the biggest factor of why the depression got to be so deep, so fast. In 4 years we went from 3% unemployment to 25% (or 5 to 37% if you go by Heritage) unemployment. From a GDP of 103 billion to 56 billion.

Hoover also changed the top income tax rate from 25% to 63% - bad move. Pressuring business to keep wages fixed was also not helpful. And of course his tariff policies, namely Smoot-Hawley, very damaging to the economy.

FDR wins the election in 1932 and takes office in 1933.
How long should an "economic stimulus" take? 12 months? 2 Years? 4? 6 years?

I believe to shift an economy that is total ruins and that to correct 1 in 4 unemployment (the most difficult thing to change in the economy is the unemployment numbers) you could look at 8 years from trough. You have to move the unemployment statistic 15 points (or 29 points if you go by Heritage's numbers) in the case of the great depression. Not the 3 to 4 points that you have to move in a recession. Usually the unemployment numbers during a recession take about 2 to 4 years to move from the trough (lowest point) to the point it was before the recession. So should you take 4 times as long to move the unemployment numbers because the unemployment numbers were 4 times as bad? (or if you go by Heritage's numbers 6 times as long to move the unemployment numbers because the unemployment numbers were 6 times as bad) Very conceivable. You could conclude that it would take 8 to 16 years to create jobs. (if you use Heritage's numbers that would multiply out to 12 to 24 years).

Do you agree that the country was still in a depression economy before shifting directly into the war economy of World War 2? If so, this means that despite two terms of New Deal policy, the U.S. had yet to be saved from the Depression?

I believe that we were almost out of the Depression by 1940. The numbers were all heading where they needed to and if you take the trends, in 2 years we would have been at 6% unemployment. We had already pretty much matched 1929 numbers regarding GDP. Certainly the war economy which started to hit in late ’41 ‘turbo charged’ the economy. But, we were well on the way. Probably a 9-10 year threshold to get us out of the Great Depression with intervention. Sort of a multiplier of a Recession – if it takes 2 to 4 years to get out of an average recession – then the Great depression, which was about 4 times as bad as a recession, could take 8 to 16 years to recover from.

Or, in this case, when will the current recession end? Well, lets hope it isn’t when the economists finally label us in a depression.

Note to Shag - I used Heritage's unemployment numbers in parens when talking about unemployment, however I used them as an aside - I really think that Heritage's unemployment figures skew this too far in my favor - and I don't think that is fair.

 

[foxpaws]

None of these number support any of the myths around FDR.
It doesn't matter who's figures you use. Getting bogged down in the figures is cover for avoiding the substance of the issue.

And foxpaws, I responded to you, even putting some of the direct questions in bold- just to make it easier for you to follow. Not being bossy, just keeping things clear.

Cal, you have to give me a little time... I know everyone seem anxious to 'get me' on this - but, people have to wait their turn...

However, I loved the bold questions - see - I answered them.

And I am sure Shag I will get around to answering yours.. however, to tell you the truth when you start out a post 'So do you have ADD or are you just being dishonest?' I sort of shut down... Sorry, human nature I suppose.

But, just as a little aside, do you know that about 95% of what has been written by economists about the New Deal has been mostly complimentary of it? Now it could be that the left is much more prolific when it comes to the written word. But, if you really wanted me to quote source on behalf of FDRs programs it is easy to find, and rather bountiful. Then this all gets down to source vs source. I have Nobel prize winning economists on 'my' side (although, once again there will be some argument that the prize doesn't mean anything ). There are economists that have won the Neemer, the Blair, tons of other peer awards that look at the New Deal as a positive and not a negative. If you go by roll count, I can win this hands down.

I chose Reagan because of Heritage - why don't you choose someone else? Once again it is easy to run the numbers. I would be very happy to compare any other president, Dem or Rep to FDRs record.

So, until I feel like being labeled a fool, having ADD (isn't that being rather mean to people who have ADD?), dishonest, mindless, illogical, smearful (not a word, but the best I can do) nonrepresentational, oh, whatever, I might let yours languish for a bit....

However conservatives and other non leftists (most of which where liberals, or more liberal, in their younger days) have reasonably considered both the liberal talking point and the conservative counter and, after applying some critical thought, rejected the liberal one, and usually accepted the conservative point.

what mishmosh Shag... If you think I talk the party line - wow - I used to write for the party, and even I wouldn't use anything so blatantly propagandist in its origins.

 

[Calabrio]

I know that recessions are cyclic, but since we have had only one ‘great depression’ how can you say that it is cyclic.

The economy is cyclical, it goes up and down.
The Great Depression was made "great" because of the actions government took and how it spread to a global depression.

From this time, too, it began to be clear that this depression was not just another cyclic valley, but a historic watershed, something vastly greater in scale and more portentous in its implications than anything that had gone on before.

That's a subjective analysis, but what made the great depression "vastly greater in scale and more portentous in is implication" was the response of the federal government to it. From wage freezes, to destruction tariffs, to huge government spending.

And since we haven’t had any downturns in the economy that would be comparable, how would you know that it would take less than a decade for a complete turnaround to happen?

Let's reverse that logic, since we haven't had any downturns in the economy comparable, WHY RECREATE THE CIRCUMSTANCES THAT LED TO IT? Why would the same government mentality that led to an international Depression, and then resulted in a decade long Great Depression that was only ended by a shift to a war economy be repeated?

Except for expanding the power of the federal government and buying the allegiance of a generation of voters to the Democrat party, why would you want to duplicate a decade of undeniably pitiful growth and staggeringly high unemployment and misery?

Seems to me, we'd want to try something different. Perhaps a policy that has been used in the pass to stimulate an economy and avoid deep, painful recessions. Something favored by Presidents like Kennedy, Reagan,and Bush.

And based upon your answers, I've never seen such incredibly convoluted reasoning to defend a policy that failed to fulfill any of it's stated objectives. You're applying strained logic to rationalize and discuss economic issues.

But, I'll respond to the questions in a separate post, I'll just submit this to acknowledge what you wrote. However, you say that it should take up to 8 years for the economy to recover. I'm not even going to debate that point right now, we'll just accept it.

It's convenient that you said 8 years because his "legacy" was saved by the aggressive World War 2 economy before reaching this arbitrary benchmark that you've created. However, since you think there is a gradual formula that should be applied to recovery, FDR failed to achieve anything resembling a recovery during all of the prewar years. So, after 4 years, wouldn't we see a significant drop in unemployment. FDR took office in 1933, so the first year that he can completely "own" would be 1934. Four years later is 1938, following his reelection.

And for convenience, we'll just refer to the chart Marcus posted:
1934: 21.7% unemployment
1938: 19.0% unemployment

 

[Calabrio]

You start off by saying that half of the population was living below the poverty line prior to 1929....You know that the "poverty line" is an arbitrary, political tool, but more importantly, where is that figure even from? If 50% of the population were in poverty before the great depression, how many people were ravaged by poverty AFTER 4 year of Roosevelt?

But I will agree with you on this point:

Hoover also changed the top income tax rate from 25% to 63% - bad move. Pressuring business to keep wages fixed was also not helpful. And of course his tariff policies, namely Smoot-Hawley, very damaging to the economy.

And on this point:

I believe that we were almost out of the Depression by 1940.

We'll both have to agree that we STILL WERE NOT OUT OF THE DEPRESSION by 1940. You're believe that a government inspired recovery was just around the corner is contrary to all of the evidence before us. You also fail to note that FDR approached Congress to increase military spending by $525,000,000 in his state of the union address in 1939. But despite that, you're looking at 9% unemployment like it's a indicator of success.

Have you read any of the 2004 report by the two UCLA economists, Harold L. Cole and Lee E. Ohanian?
http://newsroom.ucla.edu/portal/ucla/FDR-s-Policies-Prolonged-Depression-5409.aspx?RelNum=5409

I think I linked to a .pdf of the report on the board once, but I'm not sure where.... I'll see if I can find it again.

 

[shagdrum]

But, just as a little aside, do you know that about 95% of what has been written by economists about the New Deal has been mostly complimentary of it?

I seriously doubt it is 95%. That sounds like an absurd exaguration (unless you count european economists). And there really are two schools of thought in the economic community with regards to the economy; people caught up in theoreticals (buy into keynesian theory), and people who pay attention to reality (reject keynsian theory, in whole or in large part).

Besides, sheer volume of support for and idea or person doesn't mean it is correct or right.

if you really wanted me to quote source on behalf of FDRs programs it is easy to find, and rather bountiful.

How about you make an arguement and use those sources (linked to if at all possible) to reenforce your argument.

Then this all gets down to source vs source

And you can't have that, can you. Instead, we have to throw out all sources. Sorry, only non-credible sources get rejected.

Just because you cannot honestly discredit any of our sources but most all of your sources are discredited (liberals being dishonest, decietful and slanderous leads to their being discredited) doesn't mean you get to change the rules and have all sources thrown out.

I have Nobel prize winning economists on 'my' side (although, once again there will be some argument that the prize doesn't mean anything ).

Krugman is a joke, as has been demonstrated numberous times in this forum.

There are economists that have won the Neemer, the Blair, tons of other peer awards that look at the New Deal as a positive and not a negative.

Style over substance? You keep proving my point.

If you go by roll count, I can win this hands down.

Good thing we go by who makes the most reasonable argument then, right?

I chose Reagan because of Heritage - why don't you choose someone else?

Nice attempt to dishonestly shift the burden of proof.

FDR is the best example of spending with the intention of stimulating the economy. Obama has admitted that FDR's programs are the basis for his, saying in fact that FDR didn't go far enough, or do it quick enough. If you wanna ask someone why they interjected FDR into this, ask your chosen president.

So, until I feel like being labeled a fool, having ADD (isn't that being rather mean to people who have ADD?), dishonest, mindless, illogical, smearful (not a word, but the best I can do) nonrepresentational, oh, whatever, I might let yours languish for a bit....

Damn! Gonna have to wait for more examples of me being right.

what mishmosh Shag... If you think I talk the party line - wow - I used to write for the party, and even I wouldn't use anything so blatantly propagandist in its origins.

Well, didn't have to wait too long, apparently. Simply label the argument (and by extention the arguer) as spouting "blatant propaganda". Doesn't matter if what they say is accurate or not as long as you can smear and marginalize them.

Didn't you say you have read Saul Alinsky?

Saul Alinsky's Rules for Radicals; Rule 13:

Pick the target, freeze it, personalize it, and polarize it​

 

[foxpaws]

Ah, grasshopper you are learning....

Well, didn't have to wait too long, apparently. Simply label the argument (and by extention the arguer) as spouting "blatant propaganda". Doesn't matter if what they say is accurate or not as long as you can smear and marginalize them.

Didn't you say you have read Saul Alinsky?

Saul Alinsky's Rules for Radicals; Rule 13:

Pick the target, freeze it, personalize it, and polarize it

Obviously you have read Alinsky as well - what are you constantly doing to anyone who leans left on this forum? (And remember, if you just read Alinsky you will become some sort of Alinsky drone, beware Shag - just ask Cal. If you read anything you are instantly influenced by it, and will take up the mantle of their arguments...)

You target them. Obviously.

You freeze them. Narrowly defining what you want to argue regardless if the discussion needs additional information to be properly defined.

You personalize them. See above, labeling them with dishonesty, lying, etc.

You polarize them. By stating there is no middle ground - no opportunity for both sides to have valid points within an argument. It is the 'right' way or no way.

Read the rest of Alinsky Shag - you would become an excellent disciple.

“The most brilliant propagandist technique will yield no success unless one fundamental principle is borne in mind constantly - it must confine itself to a few points and repeat them over and over”

The right, and you Shag, are quite excellent at this little rule of propoganda... the right is always right, the left is always wrong. It is a lovely mantra that you have repeated over and over....

Just because you cannot honestly discredit any of our sources but most all of your sources are discredited (liberals being dishonest, decietful and slanderous leads to their being discredited) doesn't mean you get to change the rules and have all sources thrown out.

Don't even bother looking at the other side - it is always wrong.

Here, look at this article, it tells you everything you need to know.

Don't look at the raw facts, the real numbers. We have already, and our conclusion is correct.

Don't think for yourself, we can do that for you.

And, the 95% pro FDR isn't an exaggeration Shag - you have to remember that it is a pretty recent phenomenon that his policies have been so trashed. Certainly a few economists and historians went against FDR in the past. But, for over 60 years his policies were reviewed generally well. That's a lot of books and articles shag.

 

[Calabrio]

beware Shag - just ask Cal. If you read anything you are instantly influenced by it, and will take up the mantle of their arguments...)

Stay on topic. I've said nothing of the sort.

And, the 95% pro FDR isn't an exaggeration Shag - you have to remember that it is a pretty recent phenomenon that his policies have been so trashed.

Fox, you're simply wrong.
That 95% figure is pure crap.

You won't even get 95% of support amongst Keynsian economist, let alone those who study Hayek or later, Friedman. In those significant circles you'll get 0% support.

It's not a recent phenomenon that his policies have been trashed, it's just remarkable that lay people outside the realm of economics is getting to hear them now.

And it was only within the last 20 years or so that some very serious studies and papers have been written objectively examining the New Deal era. This was something that had been avoided for political reasons and, in what seemed to be, some kind of deference to FDR for leading the country during World War 2 and then croaking in office.

Academia has embraced FDR, but that's for political reasons. I've stated before, I was taught in school that FDR saved the country during the Great Depression and then won WW2. FDR is a myth, an idealized figure for the left, and it's propagated in the public schools. The facts are, he was a failure. A wonderfully gifted and skilled politician, but his domestic policies were a disaster.

foxpaws stated it already, He DID NOT bring about an end to the Depression, despite his tyrantical executive power. He did, however, lead to a fundamental redefinition of the role of the federal government. And all of the arguments liberals make in defense of his FAILED depression era policies are merely defending his political legacy, without regard for what it's actual consequences are.

 

[foxpaws]

foxpaws stated it already, He DID NOT bring about an end to the Depression, despite his tyrantical executive power.

Where?

 

[foxpaws]

Stay on topic. I've said nothing of the sort.

I was talking to shag... He wandered off topic and introduced Alinksy...

Did you read "Rules for Radicals" by Saul Alinsky, Fox? How about Antonio Gramsci? Believe in it? Did you embrace it? Try to be honest when you answer that.

So, I can read it and not embrace it, believe it? Thanks - I'll remember that... I assume that follows pretty much as a universal truth. You could read something, and not embrace it as the truth?

 

[luxuryrules]

Either way, please keep posting as you are further proving my point that liberals cannot argue accept through dishonesty, deciet and/or smears.

Thanks again.

Interestingly enough... if this were as obvious as you make it out to be, you wouldn't need to keep reminding us. Let the reader make up their own mind about liberals, and if you are so confident that what you are saying is true, then it stands to reason that the reader should reach the same conclusion. Statements like this really do not add anything to the discussion at hand, which is really quite fascinating to read.

I am impressed that at least Cal and Fox have managed to keep the labels and insults to a minimum. Kudos to both of you.

 

[Mick Jagger]

Lawmakers currently examining economic stimulus proposals should reject rebates in favor of tax rate reductions.

What tax rate reductions do you propose and what do you estimate their their effect will be?

 

[luxuryrules]

What tax rate reductions do you propose and what do you estimate their their effect will be?

Taken from Post 18 of Thread 50207:

I love this message!!!

This message is hidden because Mick Jagger is on your ignore list.​

Mick, I would suspect Shag can't see your question.

That said, Shagdrum, Mick has asked what tax rate reductions you propose and what you estimate their effects to be?

I'm interested too. I like the idea, I'm just curious to know the specifics.

 

[shagdrum]

Mick, I would suspect Shag can't see your question.

CORRECT!!!

That said, Shagdrum, Mick has asked what tax rate reductions you propose and what you estimate their effects to be?

On general principle, I don't respond to the Jagger-bot. There is very good reason for that considering his history on this forum and habit of usually not responding to anything directed at him.

I'm interested too. I like the idea, I'm just curious to know the specifics.

I am about to head off to class, so I don't have time to go into detail but...

Abolish (or put into moratorium for a year or more) the corporate and/or capital gains taxes. I can guarantee you that in 6 months we will be out of this recession (probably sooner).

There are other things that would work too, but, like I said, I don't have time to go into details.

 

[luxuryrules]

Interesting idea. According to the Government Printing Office 2005 Budget, the Feds collected 45B in capital gains and 132B in corporate taxes. I'm too lazy to look up more recent data, but figure it may cost 200-300 billion in lost tax revenue. Certainly a better deal than spending 900B on things we don't need.

However, that does fail to address any infrastructure problems - that would serve to kick start the economy by putting money back into businesses. Say nothing for the aging sewer system, shamefully inadequate power grid, overstressed and ancient rail systems, and surprisingly out-of-date data networks, to name a few. Not that the current plan does much to address any of these, but food for thought when assembling an ideal hypothetical package.

 

[foxpaws]

Also, tax relief at this time doesn't 'guarantee' job creation.

I get a lot of capital gains, and pay taxes on them (well, I used to, let's face it, this year, and last year, capital gains aren't looking too good). Would I take that extra money and buy something? Nope. Because there isn't a guarantee that the market is going to rise. I might still be experiencing capital losses the first 6 - 9 months of this year, and I can write those off anyway...

Are corporations going to take their small tax refund (since corporations do pay a rather small percentage of taxes) and hire new people. Nope. Unless there is a trend of quarterly gains in the economy, corporations are going to be sitting on their excess inventory and hunkering down. No new hires.

Right now the economy is stagnant at best, or declining (probably). Influx of money at corporate or upper income levels won't be doing anything for the immediate future. New hires need to take place to move the economy.

Creating and maintaining current infrastructure is a great way to move the economy. Keep the tax cuts - heck, go with Reagans huge tax cuts - damn the deficit anyway. But, there is no immediate effect, it takes a couple of years for those tax cuts to start affecting the bottom line. New jobs equals new money in the economy which is what we need to move things. And the government is the only 'guaranteed' creator of new jobs.

 

[shagdrum]

However, that does fail to address any infrastructure problems - that would serve to kick start the economy by putting money back into businesses. Say nothing for the aging sewer system, shamefully inadequate power grid, overstressed and ancient rail systems, and surprisingly out-of-date data networks, to name a few. Not that the current plan does much to address any of these, but food for thought when assembling an ideal hypothetical package.

None of that is neccessary or stimulates the economy. It doesn't reduce unemployment, because that type of work is temporary and counted as unemployment. Also, the waste in all those programs is tremendous!!

I already posted about the huge amount of government waste in the area of highway repair. Do you really think that is simply the exception to the rule?

Those programs have more then enough money, but it gets used for other things. They do not need more money. You need to prove that they do before you start claiming that we need to give them more.

And lowering certian taxes has been shown to increase tax revenue. We lower or abolish the corporate and/or capital gains taxes, we would see a rise in personal income taxes as unemployment decreases and wages increase.

 

[foxpaws]

But shag, right now corporations are writing off losses, and not paying taxes, you don't get to pay fewer taxes if you aren't paying taxes to begin with.

Same with capital gains - there are very few people who are realizing capital gains right now... If all you are doing is writing off the loss, there is nothing to be realized by not paying any taxes on it.

 

[Mick Jagger]

Abolish corporate taxes. I can guarantee you that in 6 months we will be out of this recession .

Reducing corporate and investment taxes encourages savings and investment vital to producing more plants and equipment, as well as better technology. However, right now, the biggest problem with our economy is not a lack of investment in plants, equipment and technology. In fact, we have plenty of plants, equipment and technology. As of December 31, 2008, U. S. INDUSTRIAL PRODUCTION AND CAPACITY UTILIZATION, was only 73.4% and dropping fast. At this time, there is a surplus, not a shortage, of industrial production capacity.

However, there is a big shortage of aggregate consumer spending. What our economy needs right now is a large quick 6% boost in consumer spending to stimulate the economy.

Cutting corporate taxes would have no significant quick positive effect on aggregate consumer spending.

 

[shagdrum]

Also, tax relief at this time doesn't 'guarantee' job creation.

Obama's wasteful stimulus package doesn't "guarantee" job creation either. But tax relief has been shown to be more likely to create jobs then stimulus spending.

How about you stop trying to raise the burden of proof (demanding a "guarantee" of job creation).

I get a lot of capital gains, and pay taxes on them (well, I used to, let's face it, this year, and last year, capital gains aren't looking too good). Would I take that extra money and buy something?

You keep trying to perpetuate that lie that unless money is being spent on new items (cars, houses, ect.) it isn't helping the economy. Unless that money is being stored under a matress, it is in the economy and helping the economy.

If you had read this brilliant article that I posted a while back, you would have read this:

How many times have we read the demand-side fallacy — namely, that economic growth “depends on” consumption, because consumption accounts for 70 percent of GDP? To say that income growth depends on consumption would be absurdly circular even in Keynesian terms, because Keynes argues that consumption depends on income. In reality, Keynes attributed sudden gyrations in income to changes in investment. This is a real theory of the business cycle, which may be both the best and least understood part of Keynes’s work. Recessions arise, he said, “where investment is being made in conditions which are unstable and cannot endure, because it is prompted by expectations which are destined to disappointment.” Think of highly leveraged investments in Las Vegas condos a few years ago by those who thought they could resell at a higher price before the teaser rate on the mortgage went higher.​

abolishing the capital gains and/or coporate tax would greatly reduce, if not elimenate those conditions that are "unstable". You would see a business boom in this country.

You also clearly missed (or ignored) this part of the article in the first post in this thread:

Supporters of rebates respond that redistributing money from "savers" to "spenders" will lead to additional spending. That assumes that savers store their savings in mattresses, thereby removing it from the economy. In reality, nearly all Americans either invest their savings (which finances business investment) or deposit it in banks (which quickly lend it to others to spend). Therefore, the money is spent whether it is initially consumed or saved. Given that reality it is more responsible to let the savers keep that money for a new home or their children's education, rather than to have Washington redistribute it to someone else to spend at Best Buy.

Simply put, low tax rates encourage working, saving, and investing, which in turn encourages job creation and wage growth. Tax rebates merely redistribute existing wealth.
​

Are corporations going to take their small tax refund (since corporations do pay a rather small percentage of taxes) and hire new people. Nope. Unless there is a trend of quarterly gains in the economy, corporations are going to be sitting on their excess inventory and hunkering down. No new hires.

Yes, because corporations are not at all competitive and would not at all be interested in getting a jump on their competitors.

Where are you getting the idea that corporations would get a "small tax refund"? That is patently absured. We have the highest corporate tax in the world!

To cite the fact that corporate taxes are a "rather small" percentage of taxes is misleading and you know it. That does not in any way mean that the money they would get is in any way small.

And I am talking tax cuts, not rebates. One has been shown to make a difference and one hasn't. To say that this is a tax refund is to mischaracterize what I said.

Once again trying to mislead and obfuscate.

Right now the economy is stagnant at best, or declining (probably). Influx of money at corporate or upper income levels won't be doing anything for the immediate future. New hires need to take place to move the economy.

I am not talking about an influx of money; that is what a rebate is.

Instead of assuming a mischaracterization of my arguement, how about you tackle what I am arguing, not what you wish I was arguing. Or do you only know mindless talking points and have to find a way to make them fit into this argument?

Abolishing the corporate and capital gains tax. Would see a huge boom in investment and a boom in business expansion, thus increasing the availible jobs and reducing unemployment.

Creating and maintaining current infrastructure is a great way to move the economy.

We already do that and don't need to try and spend more to make busy work. That has been shown to not move the economy in the right direction; in fact doing the opposite.

Keep the tax cuts - heck, go with Reagans huge tax cuts - damn the deficit anyway.

More mischaracterization of Reagan... his tax cuts reduced the deficit.

But, there is no immediate effect, it takes a couple of years for those tax cuts to start affecting the bottom line.

More mindless liberal taking points aimed at distortion.

Corporations and investors are always planning for the future. If they know that corporate taxes and/or capital gains taxes will be abolished, even for only a set time frame, then they will invest alot and grow their business quickly to make as much profit in that time frame, because they won't have to pay taxes on it.

The talking point you are mindlessly repeating ignores that fact. It assumes that there is no psychological effect on the economy when history has proven countless times, and beyond a shadow of a doubt that there is a psychological effect from actions the government takes that effect the economy.

New jobs equals new money in the economy which is what we need to move things. And the government is the only 'guaranteed' creator of new jobs.

Again, THE GOVERNMENT IS NOT CREATING NEW JOBS!!!! At least not when it comes to the infrastructure spending increases.

You keep making that assumption but can't back it up. Busywork programs that create temporary jobs don't reduce unemployment. So, in a real sense, they just keep people unemployed longer.

Abolishing capital gains and/or corporate taxes will create jobs almost immediately.

 

[shagdrum]

But shag, right now corporations are writing off losses, and not paying taxes, you don't get to pay fewer taxes if you aren't paying taxes to begin with.

Same with capital gains - there are very few people who are realizing capital gains right now... If all you are doing is writing off the loss, there is nothing to be realized by not paying any taxes on it.

Again, read this article. This quote explains it all:

How many times have we read the demand-side fallacy — namely, that economic growth “depends on” consumption, because consumption accounts for 70 percent of GDP? To say that income growth depends on consumption would be absurdly circular even in Keynesian terms, because Keynes argues that consumption depends on income. In reality, Keynes attributed sudden gyrations in income to changes in investment. This is a real theory of the business cycle, which may be both the best and least understood part of Keynes’s work. Recessions arise, he said, “where investment is being made in conditions which are unstable and cannot endure, because it is prompted by expectations which are destined to disappointment.” Think of highly leveraged investments in Las Vegas condos a few years ago by those who thought they could resell at a higher price before the teaser rate on the mortgage went higher.​

You seem to misunderstand (as most do) even the theory you subscribe to.

 

[shagdrum]

Interestingly enough... if this were as obvious as you make it out to be, you wouldn't need to keep reminding us. Let the reader make up their own mind about liberals, and if you are so confident that what you are saying is true, then it stands to reason that the reader should reach the same conclusion. Statements like this really do not add anything to the discussion at hand, which is really quite fascinating to read.

You obviously have not been following this forum for very long. If you had, you would see the patern from the left that I am talking about here.

They consistently mischaracterize, smear, intentionally make fallacious arguments and are generally, demonstratably dishonestly. When they get called on it, they get more aggressive and start with the insults.

While fox doesn't so much engage in the insults, she is a master of distortion, mischaracterization and smears to marginalize. When someone is arguing like that, it is impossible to have an honest debate with them.

That s why I focus more energy on shining a light on her dishonest tactics then on having an honest debate here. I have tried numerous times before to have an honest debate and it only gets my arguements mischaracterized. You extend a hand enough times and get it bitten, you are eventually going to become a little distrusting and hostile to the people doing the biting.

I personally don't think she is capable of any honest debate.

Why should I continue to treat someone with respect when they habitually disrespect me and/or my argument?

 

[Mick Jagger]

But tax relief has been shown to be more likely to create jobs.

How is tax relief going to create jobs?

 

[Calabrio]

How is tax relief going to create jobs?

How do high taxes create jobs?