[SK in CV]

[quote=Allan from Fallbrook]
Pushes a political agenda in the face of contrary data or information (AGAINST deficit spending during the Bush II Administration and FOR deficit spending during the Obama Administration.)

[/quote]

I’m just gonna pick on this one little item, because for the most part, I agree with you about Krugman and his ideologies.

But on this one, there is no inconsistency. It’s pretty straight forward keynsian economics. Stimulate/spend during a downturn in consumer spending (even if it causes a deficit, and for the most part, irrespective of the budget). Too many believe that is the heart and soul of keynsian economics. Almost as if tax and spend is an economic theory.

But during most of the Bush years, the economy was pretty healthy. So cutting spending and increasing taxes, and paying down debt would be the keynsian thing to do. We don’t have the same economy today as we had in 2005, so it’s logical that his recommendations wouldn’t be the same.

[SK in CV]

[quote=livinincali]
All government deficit spending is stimulus. It has to be by definition because government borrowing and spending creates a demand that wouldn’t otherwise be there. Are you arguing that only some government deficit spending is stimulus?

As for the first point we’ve been trying the Keynesian stimulus spending solution for decades and every time debt grows faster than GDP. It successfully kicked the can down the road but makes the future problem bigger and bigger. I suggest we try the solution that was used in the 1920-1921 depression. Cut spending, let the bad debt fail, prosecute those criminally responsible, and rebuild the system. Yes, there will be significantly bad short term consequences for all the actors in the economy (and we’ll realize that many entitlement promises can’t be kept) but it’s far better to do it under you own terms than letting market forces dictate.

http://en.wikipedia.org/wiki/Depression_of_1920%E2%80%9321

The economy had one of it’s best growth periods ever after the 1920-1921 depression.[/quote]

If all deficit spending is stimulative, then all government spending must be stimulative. If you have a $100 deficit, you can’t identify which $100 suddenly is stimulative. But the response is no, all deficit spending is NOT stimulative. Only increased spending is stimulative. And only required under Keynsian theory if private spending has dropped.

Arguing that we’ve tried it before and it hasn’t worked is simply not true. Stimulative spending does work. What has not happened is cutting spending and raising taxs in good times. (See tax cuts, increased spending from 2002 to 2007.) You can suggest cutting spending all you want. It can’t be stimulative. It won’t work.

[SK in CV]

[quote=Arraya]There is very little difference between so-called Keynesian and Austrialian economics. The both rest on the same fundamental assumptions. All economists are politicians wrapped in math.

[/quote]

Australian? Are you dissing the wallaby curve?

[SK in CV]

[quote=livinincali][quote=SK in CV]
You’re closer to correct, but that’s not what I was responding to. He said spending to get out of debt. Keynes suggested just the opposite. There’s a big difference between getting out of debt and getting out of a recession. Keynesian ecomomics would lead to cutting spending, increasing taxes and deleveraging in times of economic growth.[/quote]

This is certainly true and another one of the primary excuses that is used to explain why the stimulus isn’t working as intended. If we admit that our government can’t follow this part of the Keynes economic theory why do we prescribe Keynes solutions to recessions.

Stimulus is politically popular and it does give the illusion of working over the short term, but when the government is deficit spending 1.5 trillion a year to get 420 billion (14 trillion economy * 3% growth) in growth you’re going to have a problem. Stimulus would only be worth while if the stimulus spending is less than the growth in GDP. There’s only one small window from 1997-2001 in the past 30 years where GDP grew faster than Government debt and that was during the internet boom.[/quote]

I don’t think the first part of your comment makes much sense. You’re essentially arguing that if we didn’t follow a particular economic model when the economy was decent, we shouldn’t try it now. Even though the model we did follow, didn’t work.

Beyond that, you’re mixing up a couple things. The purpose of stimulus would be to increase GDP, not decrease spending or debt. Ideally, that stimulus will increase GDP greater than the amount of the stimulus. The comparison to debt or annual deficits is false. The two are not directly related.

[SK in CV]

[quote=henrysd]I just read a different article saying rent income may be exempt from 3.8% Obama tax if you can prove it is active income. Obama law actually says 3.8% on unearned income normally from passively income including capital gain and dividend.

If you manage the rental homes actively, you are making an active income, so it does not subject to the 3.8% tax for high earners.

My article is from
http://www.billlosey.com/articles/taxing-the-rich-to-pay-for-health-care.php%5B/quote%5D

The law doesn’t say the tax is on unearned income. The tax is on net investment income. Rental income is (generally) passive. The author of that article wasn’t sufficiently competent to write it. Real estate investors aren’t lucking out, as the article implies. Rental income is not investment income. The tax does not apply.

[SK in CV]

[quote=Hobie]Still related. Each affects the other.

Current policy has been to sell bonds that increase debt which is spend with the intention of reversing the recession trend. Working? 😉

Rather getting bogged down with theories, like to hear your view on how the mood of the country affects economic decisions and growth.[/quote]

No, it’s not the same thing. He set up a straw man, by misstating an economic theory, then shot it down.

Yes, mood of the country, particularly consumer confidence affects economic decisions, and growth. We have an economy driven by consumer spending. But consumer confidence follows jobs. More jobs, better confidence. You didn’t ask, but I’ll share anyway. There is no quick fix to the problem of jobs. Somewhere between 4 and 5 million jobs were lost related to residential construction. Those jobs aren’t coming back any time soon. And there is nothing that could have been done, or can be done now to fix that.

[SK in CV]

[quote=Hobie]Sure it does. It depends on where the money to spend originates. Private or public sector.

Keyes believes govt spending, ‘primes the pump’ by increasing the money supply. When it doesn’t work that is when hyper inflation begins. As Livincali cites.

If the same spending is by the private sector ie. banks lending or spending savings then you are correct with respect to inflation.

The bigger picture is not so much the academic definitions but it the general ‘mood’ of the country. If folks and business feel confident and secure they spend and take risks. When there is doubt, as there is now, people hang on to their money and business hunkers down until they feel the tide has turned.[/quote]

You’re closer to correct, but that’s not what I was responding to. He said spending to get out of debt. Keynes suggested just the opposite. There’s a big difference between getting out of debt and getting out of a recession. Keynesian ecomomics would lead to cutting spending, increasing taxes and deleveraging in times of economic growth.

[SK in CV]

[quote=livinincali]

I’ve yet to see one successful example of a person, corporation or country spending it’s way out of debt successfully. It always ends in a hyper inflationary money printing or a deflationary depression, but it’s different this time. Krugman’s got it all figured out.[/quote]

I have no idea whether there are examples or not of people, or corporations, or countries spending their way out of debt. I do know that individuals spending and individual corporatations spending, doesn’t lead to inflation. But whether there are examples or not isn’t really material as related to Keynsian economics. It’s not a tenet of Keynsian ecomonics. Not even close.

[SK in CV]

Destroyed? I guess it depends on perspective. I’m not a particular fan of Krugman’s tactics. Too ideological. A bit dismissive of the tiniest bit of evidence countering his arguments. But his larger view of the european economy over the last 4 years has been spot on, and results have been as he predicted.

If you think Ron Paul kicks ass in every economic debate, then maybe Krugman got destroyed. I’ve never seen that. Nor did I see any destruction in this debate. Two varied approaches to economics. One pretty conventional. One a joke.

[SK in CV]

[quote=KSMountain][quote=SK in CV], but I still think of the left/right spectrum as being socialism on the left and capitalism on the right.[/quote]
Wait. What? So capitalism is the hard right now? What a shame if some people think that now.
I thought hard right was supposed to be Nationalism, Fascism, etc…[/quote]

No, that’s not anything like what I said. Neither socialism nor capitalism are at extreme ends of the spectrum.

[SK in CV]

[quote=Allan from Fallbrook]
As far as conservatives and media and think tanks, that’s arrant nonsense. The breadth and depth of such organizations and agencies spans a wide ideological divide and it’s quite easy to find as many foaming-at-the-mouth Leftist groups as Rightist groups. [/quote]

I have to take a little exception to this. If you had limited the argument to conservatives and liberals, I wouldn’t mention it. But leftists in the media? I’ll acknowledge definitions of those terms have changed over the years, but I still think of the left/right spectrum as being socialism on the left and capitalism on the right. I can think of one two media types that are clearly on the left, but only one of them foaming at the mouth. And a whole lot on the right, despite the fact that many of them don’t really know what the socialism that they assail really is.

[SK in CV]

[quote=mike92104][quote=SK in CV][quote=mike92104]
You mean this one? The one that states my position exactly as I just mentioned?
Why don’t you give up the straw man BS. The point I made is valid and correct.[/quote]

Valid point? I don’t know. Your final point, with the absurd claim that the average person pays over 50% in taxes isn’t valid. You were right about the rates when income taxes were initiated being between 1 and 7%, but rates haven’t steadily increased ever since. They’ve gone up and down. Top rates have been lower during the last 25 years than they were at any time in the 60 years before that. During WWII and immediately after, top rates were over 80%, and still 70% until the 80’s. I think the argument could be made those rates are confiscatory. In comparison, today’s rates arent.

So no, I don’t think your conclusion is based on accurate data, and not particularly compelling.[/quote]

again, Straw Man. You don’t have a valid argument against my point which was the steadily increasing amount of taxes, and the steadily increasing amount of spending going on, so you instead try to invalidate the entire argument because you disagree with some of the data I have provided.

Anyway. I done with your little game.[/quote]

You can be done with it if you wish. But it wasn’t a straw man argument. The only argument I made was disputing the evidence you used to support your argument. I didn’t disagree with evidence. You made false claims, I disputed their accuracy. Do you find fault with any my claims that your evidence is bogus?

And now you’re changing YOUR argument. I didn’t respond to anything you said about spending. Spending has obviously increased. But facts are important. Taxes don’t consume 50% of average income. Rates haven’t tripled. There is plenty of evidence you can cite that is accurate. There’s no need to make exaggerated claims.

[SK in CV]

[quote=mike92104]
You mean this one? The one that states my position exactly as I just mentioned?
Why don’t you give up the straw man BS. The point I made is valid and correct.[/quote]

Valid point? I don’t know. Your final point, with the absurd claim that the average person pays over 50% in taxes isn’t valid. You were right about the rates when income taxes were initiated being between 1 and 7%, but rates haven’t steadily increased ever since. They’ve gone up and down. Top rates have been lower during the last 25 years than they were at any time in the 60 years before that. During WWII and immediately after, top rates were over 80%, and still 70% until the 80’s. I think the argument could be made those rates are confiscatory. In comparison, today’s rates arent.

So no, I don’t think your conclusion is based on accurate data, and not particularly compelling.

[SK in CV]

[quote=mike92104]
No, if you read all of my posts in this thread, you’ll see that my original point was that taxes and spending have been steadily increasing usually sold to us as being “just a little bit” or “just a little bit more”. I was trying to point out that all of these small tax and spending increases have really added up over the years.[/quote]

I didn’t respond to all your posts in this thread. I responded to one of them, in which you asserted an absurd claim.

[SK in CV]

[quote=mike92104]
Maybe this will help you understand my point:

http://www.glencoe.com/sec/socialstudies/economics/econprinciples2001/pdfs/C10-01C-820487.pdf

We’re now spending more than twice as much as we did to win WWII.[/quote]

No, your point was:

[quote=mike92104]Add to that all of the other taxes we are forced to pay, and it’s estimated the average person pays over 50% (50 f-ing %!!). [/quote]

The chart you linked to has nothing to do with percentage of income that goes to taxes. Though it is interesting, it’s almost an entirely different subject.

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