Posting Towards Gomorrah

[Secret_Agent_Man]

Originally posted by Mmmm, Burger (C.J.)
The odd thing is, I see the party winning the house being worse of in 2008--for either party. If the Dems win, they'll be expected to try to do something, but they won't, other than investigations. And those will make them look petty. If the R's win, of course they have to do something, but they won't either, and 8 years will go down as the biggest do-nothing admin. of all time, or at least in recent memory.

In other words, that journey may be better taken by getting 217 seats.

That's a good point. Having lost in 2004 is sure as hell is helping the Dems in this election cycle.

S_A_M

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
The odd thing is, I see the party winning the house being worse of in 2008--for either party. If the Dems win, they'll be expected to try to do something, but they won't, other than investigations. And those will make them look petty. If the R's win, of course they have to do something, but they won't either, and 8 years will go down as the biggest do-nothing admin. of all time, or at least in recent memory.

In other words, that journey may be better taken by getting 217 seats.

While there's an element of truth to this, I suspect a Democratic victory this year will be better for the country.

The Dems would have control of committees in the House (I'm not hoping for the Senate at this point), and would have to put together their policies and proposals and get some bills out there. Yes, everything important is likely to get vetoed, but it will provide a better basis for comparing programs in the 2008 election. Though my suspicion is that the Rs will continue to run against McGovern, regardless of what proposals are made, which is what Spanky is doing.

There will also be a check on some of the Republican pork; there has been a strong element over the last six years of looking to buy the continued loyalty of the Red States. Things like moving military bases out of all the Blue States will become much tougher. Compromising over budget resolutions is almost always a good thing.

[Gattigap]

Originally posted by Tyrone Slothrop
Apropos of our conversation, here's a piece from Jonathan Chait on the subject:

*sigh*

[Ignore]

Originally posted by Gattigap
*sigh*

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
The Dems would have control of committees in the House (I'm not hoping for the Senate at this point), and would have to put together their policies and proposals and get some bills out there. Yes, everything important is likely to get vetoed, but it will provide a better basis for comparing programs in the 2008 election.

True, although would you want to run on the legislation put forth by Conyers (Judiciary), Frank (Banking), Dingell (Energy), and Rangel (Ways and Means)?

[Greedy,Greedy,Greedy]

Originally posted by Mmmm, Burger (C.J.)
True, although would you want to run on the legislation put forth by Conyers (Judiciary), Frank (Banking), Dingell (Energy), and Rangel (Ways and Means)?

Don't underestimate, for example, Barney Frank's ability to put together good legislation and to hammer out reasonable compromises. I once served on a committee with him that focused on Middle East policy, and he was one of the best around at getting people with wildly divergent and often diametrically opposed views to talk productively and find some common ground.

There has been a general problem in the House of both parties electing people increasingly far from the center (Centrist Rs are more an engandered species than centrist Ds), but the Democrats, who have been the ones who needed to build broader coalitions, are the ones who have gotten better at reaching toward the center.

[Mmmm, Burger (C.J.)]

Originally posted by Greedy,Greedy,Greedy
Don't underestimate, for example, Barney Frank's ability to put together good legislation and to hammer out reasonable compromises. I once served on a committee with him that focused on Middle East policy, and he was one of the best around at getting people with wildly divergent and often diametrically opposed views to talk productively and find some common ground.

There has been a general problem in the House of both parties electing people increasingly far from the center (Centrist Rs are more an engandered species than centrist Ds), but the Democrats, who have been the ones who needed to build broader coalitions, are the ones who have gotten better at reaching toward the center.

I agree that of those 4, he's certainly the least of the problems.

[Spanky]

Originally posted by Tyrone Slothrop
I don't think anyone disagrees with the concept that tax cuts, in general, promote growth.

Not everyone. Some Economists think that deficits really hamper growth and that is why they were against Bush's tax cut. Even a Supply Sider would agree that at a certain level tax cuts would cause a decrease in growth.

Originally posted by Tyrone Slothrop
The criticism of the Bush tax cuts -- well, one criticism of them -- is that they were a less effective way of spurring growth than other alternatives.

This ought to be good. What alternatives?

I

Originally posted by Tyrone Slothrop don't think your discussion above captures the various issues on which supply-siders disagree with other economists, conservative and otherwise.

What did I miss?

Originally posted by Tyrone Slothrop I thought you were making the claim above that tax cuts pay for themselves in the short term in the sense that because they spur growth, the result is that the government takes in more revenue at lower tax rates than it would have at higher rates absent that growth. Only a few economists not on the government payroll believe this, and it's not clear that those on the government who are saying it also believe it.

If tax cuts spur more growth than they would absent the tax cuts then they will pay for themselves. Full Stop. The only issue is how long will it take. If the tax cuts cause more crowding out than growth, they will not pay forthemselves. The Economists who don't think the Bush tax cut was a good thing think that the crowding out takes away more growth than without them. So there may be growth but it can't be attributed to the tax cut. The issue is whether they spur growth. If you have massive deficits, and you cut taxes without cutting spending, then at some point the crowding out will negate any positive effect of the tax cut. Supply Siders think that the crowding out occurs at only much higher levels. Keynsians think that when the economy is already growing a tax cut will not increase growth. The economy is already growing at the maximum rate so a tax cut will only lead to more crowding out - no gain.

No Economist argues that the Bush tax cut brought in more growth than would have otherwise occurred but they were a bad call because they have not paid for themselves (and the implication in there is yet). That is only an argument that would be made on this board or by someone who doesn't understand economics.

[SlaveNoMore]

Mmmm, Burger (C.J.)
True, although would you want to run on the legislation put forth by Conyers (Judiciary), Frank (Banking), Dingell (Energy), and Rangel (Ways and Means)?

I'm actually looking forward to it. Should be amusing, no?

[Mmmm, Burger (C.J.)]

Originally posted by SlaveNoMore
I'm actually looking forward to it. Should be amusing, no?

Yes. It would be quite entertaining to see Pelosi act as ring-master of a 13-ring circus.

[Spanky]

Originally posted by Greedy,Greedy,Greedy
Not all cuts are created equal in spurring growth (sorry to take the discussion beyond bumper sticker level) - for example, Clinton focused many of his cuts on investment incentives, including some particularly targetted toward venture capital. Those cuts are more effective at spurring growth than simple rate reduction. In particular, a rate differential oriented toward particular investment can have an impact disproportionate to cost.

This is true. I never said this wasn't ture.

Originally posted by Greedy,Greedy,Greedy And, failure to raise sufficient revenue can deter growth - part of what attracts grown is infrastructure, and someone has to pay for it. Likewise, our economy is increasingly focused on and dependent on an educated workforce, and someone has to pay for that education. Spanky's made these points himself before.

This is a balancing act; the Democrats acknowledge that, and debate the balance. Many R's, however, deny it, and simply push for every cut they can get. While, of course, still spending like drunken sailors. All you have to do is compare records.

I don't care what the lay people say. We were talking about Economists. The debate among economists is when are tax cuts effective at producing growth. There is a tension between tax cuts and deficits. The goal is maximum growth, and the argument is where spending and taxation produce the optimal result. Supply Siders just think deficits are not as bad at detering growth as other economists. They also think tax cuts spur growth in more circumstances than other economists.

But the goal is always growth. Once you have admitted that a certain economic policy on balance has produced more growth than would have occurred with out it, then you are saying that policy was a good thing. The only effective economic argument against the Bush tax cuts is that on balance the tax cuts did not produce as much growth as would have occured without them. In other words, the resulting deficits crowded out so much private investment that growth was hurt and we would have pulled out of the recession quicker absent the tax cuts.

But once you concede the tax cuts brought in more growth than would have occurred without them, from an Economists perspective, the debate over the utility of Bush's tax cuts is over.

[Greedy,Greedy,Greedy]

Originally posted by Spanky
This is true. I never said this wasn't ture.



I don't care what the lay people say. We were talking about Economists. The debate among economists is when are tax cuts effective at producing growth. There is a tension between tax cuts and deficits. The goal is maximum growth, and the argument is where spending and taxation produce the optimal result. Supply Siders just think deficits are not as bad at detering growth as other economists. They also think tax cuts spur growth in more circumstances than other economists.

But the goal is always growth. Once you have admitted that a certain economic policy on balance has produced more growth than would have occurred with out it, then you are saying that policy was a good thing. The only effective economic argument against the Bush tax cuts is that on balance the tax cuts did not produce as much growth as would have occured without them. In other words, the resulting deficits crowded out so much private investment that growth was hurt and we would have pulled out of the recession quicker absent the tax cuts.

But once you concede the tax cuts brought in more growth than would have occurred without them, from an Economists perspective, the debate over the utility of Bush's tax cuts is over.

Every now and then, I find myself wishing that I lived in a world filled with simple answers. Iraq=terrorism=evil, so war is good. Tax cut=growth=revenue, so tax cuts are good. Life is so simple! Economics is all laid out in a nice simple box isolated from all the other messy things. Deer nibble on the brush in the backyard and all is good.

Then I read my 5 year old a book, and delight in watching him ask question after question, discovering the beauty and interest of a world without easy answers.

[Spanky]

Originally posted by Tyrone Slothrop
The way that you can tell that Spanky is a Modern Republican is that he posts about the economic effects of tax cuts while completely ignoring the notion that the government has to pay for its spending somehow, and the associated economic effects.

You really don't understand at all what I am saying, because you don't understand basic economic theory. If tax cuts spur more growth than would have occurred without them eventually they will pay for themselves. But all economists agree that at a certain level tax cuts will not pay for themselves and therefore need to be accompanied by appropriate spending cuts, and if you can't have the spending cuts then the tax cuts would be unwise. The argument is where is the level. Although some economists argue that tax cuts that are not accompanied by spending cuts are always unwise.

Originally posted by Tyrone Slothrop
From what Spanky has posted above, he obviously supports continuing to cut taxes until the government collects none.

Well you have pretty much given up all pretense to having a rational argument. Now you are just making up claims and assinging them to me. You don't understand Supply Sider theory. No economist I have ever heard of has ever proposed this, and I certainly have not. A Supplier Sider would not propose this.

Originally posted by Tyrone Slothrop
As a matter of electoral politics, this is wonderful stuff -- it's how you buy votes from rich people. As a matter of public policy, it's insane.

Look if you don't understand the subject, just admit it instead of lashing out with irrational accusations.

[Spanky]

Originally posted by Mmmm, Burger (C.J.)
Who are the supply siders in favor of persistent deficits?

No one supports consistent deficits. The Supply Sider would argue that the deficits do not cause that much crowding out so the tax cuts would continue their positive effect and eventually pay for themselves. Other economist would argue that the crowding out caused by the deficits would deter the growth never allowing the tax cuts to pay for themselves.

Originally posted by Mmmm, Burger (C.J.) The supply siders so far as I can tell believe only in "starving the beast"--that is, the only way to reduce overall government involvement in the economy is first to cut taxes, and make it impossible to spend more. That's true to a point, because it's been consistently shown that Congress will spend more than 100% of every revenue increase resulting from higher taxes.

Starving the beat is not an economic argument. It is not part of Supply Sider theory. Supply Sider theory is that tax cuts, even when you have huge deficits, will create growth, and such growth will always eventually cover the deficit. Of course even Supply Siders will admit that at a certain point deficits become so large that they kill growth. In addition, a Supply Sider would agree that some government spending is important. But a Supply Sider would argue that when taxation is above a certain level that cutting the taxes will always bring in more revenue than raising them. Of course once you cut down to that level then tax cuts do not bring more growth. Most Supply Siders think we are above that level right now. Of course when you raise spending you also raise the level. The poin at which cutting taxes will stop bringing in more revenue is hotly debate among Supply Siders.

Originally posted by Mmmm, Burger (C.J.) Of course, Congress will spend more than 100% of any revenue, so that's a bit irrelevant. And the size of government is fundamentally determined by spending, not by taxing, and absent a committment to cut spending, not much changes.

This was not true for most of our country's history.

[Mmmm, Burger (C.J.)]

Originally posted by Spanky
I don't care what the lay people say. We were talking about Economists. The debate among economists is when are tax cuts effective at producing growth. There is a tension between tax cuts and deficits. The goal is maximum growth, and the argument is where spending and taxation produce the optimal result. Supply Siders just think deficits are not as bad at detering growth as other economists. They also think tax cuts spur growth in more circumstances than other economists.

I think you are conflating two very distinct approaches.

1) Supply-side economics is classical economics--it posits that an economy will maximize productivity and growth when barriers to trade, including various taxes, are at a minimum and as non-distortionary as possible. Any taxes, or at least any above the minimum necessary for government, will distort incentives and lead to reduced growth.

2) Keynesian economics--this is the FDR-style policy, that says deficit spending can be used to stimulate an economy, and, should be used when an economy needs stimulation. (Conversely, when an economy is booming, this model says the government should run a surplus to "cool" the economy and smooth out the business cycle)

Supply-siders are not Keynesians. In many ways they could not be more opposite. To suggest that a genuine supply sider advocates for deficits is either misleading or wrong. A true supply sider would not advocate deficits, because they understand that the effective tax rate is equal to government spending, not government taxing, in the long run.