[EconProf]

Deed in Lieu of foreclosure is when the lender and borrower agree to avoid the expense and hassle of the foreclosure process and the property is given over to the lender who then presumably sells it. It actually makes a lot of sense when the value is only a little less than the mortgage, because it lessens property deterioration during the FC process, speeds everything up, and is pretty common among private TD lenders. Banks have their rules and bureaucracies, and have to do everything the hard way…don’t want to admit their mistakes, etc., so they do it less frequently.

[EconProf]

Deed in Lieu of foreclosure is when the lender and borrower agree to avoid the expense and hassle of the foreclosure process and the property is given over to the lender who then presumably sells it. It actually makes a lot of sense when the value is only a little less than the mortgage, because it lessens property deterioration during the FC process, speeds everything up, and is pretty common among private TD lenders. Banks have their rules and bureaucracies, and have to do everything the hard way…don’t want to admit their mistakes, etc., so they do it less frequently.

[EconProf]

Deed in Lieu of foreclosure is when the lender and borrower agree to avoid the expense and hassle of the foreclosure process and the property is given over to the lender who then presumably sells it. It actually makes a lot of sense when the value is only a little less than the mortgage, because it lessens property deterioration during the FC process, speeds everything up, and is pretty common among private TD lenders. Banks have their rules and bureaucracies, and have to do everything the hard way…don’t want to admit their mistakes, etc., so they do it less frequently.

[EconProf]

Deed in Lieu of foreclosure is when the lender and borrower agree to avoid the expense and hassle of the foreclosure process and the property is given over to the lender who then presumably sells it. It actually makes a lot of sense when the value is only a little less than the mortgage, because it lessens property deterioration during the FC process, speeds everything up, and is pretty common among private TD lenders. Banks have their rules and bureaucracies, and have to do everything the hard way…don’t want to admit their mistakes, etc., so they do it less frequently.

[EconProf]

You are correct that a lot of factors are always at work in determining the economy’s fate and thus tax revenues than just tax rates. For example, the late 1960s economy was boosted by the Vietnam War ramp up of government spending, so it wasn’t just the Kennedy tax cut.
Generalizations in economics are always prefaced with the term ceteris paribus, or “other things remaining equal”. In analyzing empirical results, of course, those other things are always dancing around, making for endless debate in faculty lounges and insuring full employment for us economists.
The subject of time lags is fascinating to me since I did a lot of research on it in graduate school. It is sadly underappreciated by journalists and politicians and we are now paying the price. For example, the stimulus bill totaling some 3/4 $trillion last winter is only about 10% spent, according to recent news reports. I knew this would happen when they passed it and the advocates made extravagent promises about how quickly and powerfully it would help the economy and create jobs. It is entirely possible that the stimulus will have its biggest effect just when the economy is recovering on its own. The ramp up in government programs designed to be countercyclical would end up being procyclical, adding to inflation.
But then, maybe that’s the idea…

[EconProf]

You are correct that a lot of factors are always at work in determining the economy’s fate and thus tax revenues than just tax rates. For example, the late 1960s economy was boosted by the Vietnam War ramp up of government spending, so it wasn’t just the Kennedy tax cut.
Generalizations in economics are always prefaced with the term ceteris paribus, or “other things remaining equal”. In analyzing empirical results, of course, those other things are always dancing around, making for endless debate in faculty lounges and insuring full employment for us economists.
The subject of time lags is fascinating to me since I did a lot of research on it in graduate school. It is sadly underappreciated by journalists and politicians and we are now paying the price. For example, the stimulus bill totaling some 3/4 $trillion last winter is only about 10% spent, according to recent news reports. I knew this would happen when they passed it and the advocates made extravagent promises about how quickly and powerfully it would help the economy and create jobs. It is entirely possible that the stimulus will have its biggest effect just when the economy is recovering on its own. The ramp up in government programs designed to be countercyclical would end up being procyclical, adding to inflation.
But then, maybe that’s the idea…

[EconProf]

You are correct that a lot of factors are always at work in determining the economy’s fate and thus tax revenues than just tax rates. For example, the late 1960s economy was boosted by the Vietnam War ramp up of government spending, so it wasn’t just the Kennedy tax cut.
Generalizations in economics are always prefaced with the term ceteris paribus, or “other things remaining equal”. In analyzing empirical results, of course, those other things are always dancing around, making for endless debate in faculty lounges and insuring full employment for us economists.
The subject of time lags is fascinating to me since I did a lot of research on it in graduate school. It is sadly underappreciated by journalists and politicians and we are now paying the price. For example, the stimulus bill totaling some 3/4 $trillion last winter is only about 10% spent, according to recent news reports. I knew this would happen when they passed it and the advocates made extravagent promises about how quickly and powerfully it would help the economy and create jobs. It is entirely possible that the stimulus will have its biggest effect just when the economy is recovering on its own. The ramp up in government programs designed to be countercyclical would end up being procyclical, adding to inflation.
But then, maybe that’s the idea…

[EconProf]

You are correct that a lot of factors are always at work in determining the economy’s fate and thus tax revenues than just tax rates. For example, the late 1960s economy was boosted by the Vietnam War ramp up of government spending, so it wasn’t just the Kennedy tax cut.
Generalizations in economics are always prefaced with the term ceteris paribus, or “other things remaining equal”. In analyzing empirical results, of course, those other things are always dancing around, making for endless debate in faculty lounges and insuring full employment for us economists.
The subject of time lags is fascinating to me since I did a lot of research on it in graduate school. It is sadly underappreciated by journalists and politicians and we are now paying the price. For example, the stimulus bill totaling some 3/4 $trillion last winter is only about 10% spent, according to recent news reports. I knew this would happen when they passed it and the advocates made extravagent promises about how quickly and powerfully it would help the economy and create jobs. It is entirely possible that the stimulus will have its biggest effect just when the economy is recovering on its own. The ramp up in government programs designed to be countercyclical would end up being procyclical, adding to inflation.
But then, maybe that’s the idea…

[EconProf]

You are correct that a lot of factors are always at work in determining the economy’s fate and thus tax revenues than just tax rates. For example, the late 1960s economy was boosted by the Vietnam War ramp up of government spending, so it wasn’t just the Kennedy tax cut.
Generalizations in economics are always prefaced with the term ceteris paribus, or “other things remaining equal”. In analyzing empirical results, of course, those other things are always dancing around, making for endless debate in faculty lounges and insuring full employment for us economists.
The subject of time lags is fascinating to me since I did a lot of research on it in graduate school. It is sadly underappreciated by journalists and politicians and we are now paying the price. For example, the stimulus bill totaling some 3/4 $trillion last winter is only about 10% spent, according to recent news reports. I knew this would happen when they passed it and the advocates made extravagent promises about how quickly and powerfully it would help the economy and create jobs. It is entirely possible that the stimulus will have its biggest effect just when the economy is recovering on its own. The ramp up in government programs designed to be countercyclical would end up being procyclical, adding to inflation.
But then, maybe that’s the idea…

[EconProf]

SK: When tax rates change it takes a while for the actors in the economy to change their behavior, then the hiring, investing, building etc. to increase or decrease, then output and incomes to change, then the tax revenues approaching the following year’s tax deadline of April 15 to change. These time lags are why it is difficult to ascribe a change in government revenues to an earlier change in the tax rate. And that’s why I gave you the six-year result after the tax rates were changed under Kennedy and then Reagan.

[EconProf]

SK: When tax rates change it takes a while for the actors in the economy to change their behavior, then the hiring, investing, building etc. to increase or decrease, then output and incomes to change, then the tax revenues approaching the following year’s tax deadline of April 15 to change. These time lags are why it is difficult to ascribe a change in government revenues to an earlier change in the tax rate. And that’s why I gave you the six-year result after the tax rates were changed under Kennedy and then Reagan.

[EconProf]

SK: When tax rates change it takes a while for the actors in the economy to change their behavior, then the hiring, investing, building etc. to increase or decrease, then output and incomes to change, then the tax revenues approaching the following year’s tax deadline of April 15 to change. These time lags are why it is difficult to ascribe a change in government revenues to an earlier change in the tax rate. And that’s why I gave you the six-year result after the tax rates were changed under Kennedy and then Reagan.

[EconProf]

SK: When tax rates change it takes a while for the actors in the economy to change their behavior, then the hiring, investing, building etc. to increase or decrease, then output and incomes to change, then the tax revenues approaching the following year’s tax deadline of April 15 to change. These time lags are why it is difficult to ascribe a change in government revenues to an earlier change in the tax rate. And that’s why I gave you the six-year result after the tax rates were changed under Kennedy and then Reagan.

[EconProf]

SK: When tax rates change it takes a while for the actors in the economy to change their behavior, then the hiring, investing, building etc. to increase or decrease, then output and incomes to change, then the tax revenues approaching the following year’s tax deadline of April 15 to change. These time lags are why it is difficult to ascribe a change in government revenues to an earlier change in the tax rate. And that’s why I gave you the six-year result after the tax rates were changed under Kennedy and then Reagan.

[EconProf]

The record on tax cuts and their stimulative effect on the economy is not hard to find: goggle Reagan Tax Cuts or Kennedy Tax Cuts Revenue Effects, and you will find a variety of studies, articles, statistics, etc.
The clear message: total government revenues collected go UP in the years following the tax cut as the economy expands and people earn more and pay more in our progressive tax rate structure. For this to work, the tax rates have to first be high enough to discourage work, investment, risk-taking, etc. Kennedy cut marginal rates from a wartime-inspired 90% to 70% in the early 1960s and investment and the economy took off. Revenues increased from $94 billion to $153 billion from 1961 to 1968 (up 33% after inflation).
The early 1980s Reagan tax cut, once fully in effect in January of 1983 stimulated investment, hiring, and the economy to increase revenues by 54% by 1989 (28% after inflation).
With top federal rates now around 40%, there is less room for the stimulative effect to outweigh the effect of lower absolute rates, so there is some debate as to whether rate cuts would be revenue neutral or even decrease total revenues. But as to whether different tax rates and tax types affect behavior, that argument has long been settled.

[Author]

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