An extra two percent GDP per year is a Germany every ten years

[Arnie]

Why is it so hard to imagine that the more dollars in the private sector, the more growth in the overall economy? There is only ONE way for the govt to spend more. That's either through taxes now or taxes later in the form debt. Either way, it all comes from the private sector. The fewer dollars in the private sector, the less growth you will have.

I think Obama's policies have proven this in spades (no pun intended). At any other time in our modern history, a downturn in the economy like we had in 2008 has led to well above average growth. In some cases near 7-8%. We're lucky to see 2.5% and that will probably be revised to below 2%.

http://www.investors.com/politics/e...-leaves-economy-even-further-behind-the-pace/

 

[Ricter]

Why is it so hard to imagine that the more dollars in the private sector, the more growth in the overall economy?

Because the dollars may be in the hands of a few, so the economy has low effective demand.

 

[jem]

No one is denying that govt spending can stimulate the economy... we have plenty of that for decades. The question is when, at what cost and how effective is it.

Keynes also had something else to say on the subject... he saw that Supply side economics had its place too.

(hey Nitro this is responsive to your question about 4% growth or whatever arbitrary number you wish to pick... I have no idea why the left denies these basic economic realities. Can you think of a reason they may lie about this subject? This is from Keynes himself.)

http://www.elitetrader.com/et/index.php?threads/drunks-and-keynesians.280143/#post-3906433


Nor should the argument seem strange that taxation may be so high as to defeat its object, and that, given sufficient time to gather the fruits, a reduction of taxation will run a better chance than an increase of balancing the budget. For to take the opposite view today is to resemble a manufacturer who, running at a loss, decides to raise his price, and when his declining sales increase the loss, wrapping himself in the rectitude of plain arithmetic, decides that prudence requires him to raise the price still more--and who, when at last his account is balanced with nought on both sides, is still found righteously declaring that it would have been the act of a gambler to reduce the price when you were already making a loss.

Because the dollars may be in the hands of a few, so the economy has low effective demand.

 

[Ricter]

No one is denying that govt spending can stimulate the economy... we have plenty of that for decades. The question is when, at what cost and how effective is it.

Just as one may question how much stimulus can realistically be generated by cutting taxes on a group that is already hording money.

 

[jem]

absolutely, hence the concept of supply and demand curves and dare I say the laffer curve.

at some point on the curve... lower taxes might not raise more revenues for the Federal Govt. But... so far we have yet to get to that point after tax cuts. So why not keep cutting.

hoarding money... is likely going to be a reaction to bad central banking and or govt policies. If the demand was so distorted by bad policy that people see no point of spending or investing their money right now... and this climate persists... It was likely caused by things the central bank did... like what it did before the great depression or

the 2008 artificially low interest rate environment. There was so much over capacity in the housing and finance sector.... it was like pushing on a string at first.

But, when the govt cut payroll taxes and created tax cuts / incentives for home ownership... things started to improve.

Just as one may question how much stimulus can realistically be generated by cutting taxes on a group that is already hording money.

 

[Ricter]

But... so far we have yet to get to that point after tax cuts.

You live in a high (the highest?) tax state and, year after year, complain monomaniacally about taxes. Where's the personal responsibility you reps are supposed to hold so high? Move.

 

[Ricter]

It is all about an extra one, and preferably two percent GDP growth per year. On an economy the size of the US, that is an extra Germany's worth of growth every ten years.

Imo, the only thing that can take us back to 4% GDP like the early 90's is some unanticipated technological revolution, like the Internet did then.

People say it was Reagan's policies. Maybe. I claim it was the commercialization of the internet and Reagan or no Reagan, or Clinton for that matter, were irrelevant.

Otherwise, 2% GDP is the new normal:

http://www.statista.com/statistics/188165/annual-gdp-growth-of-the-united-states-since-1990/

Germany is a very socialistic country compared to us, what with their worker controlled businesses and all. Can we find a more capitalistic country for our yardstick? Maybe one with decent worker productivity, unlike Germany, which is awful because socialism doesn't work.

 

[AAAintheBeltway]

"...One economic theory has been repeated so often for so long in this country that it has become an accepted fact:

Tax cuts spur growth..."

http://www.businessinsider.com/study-tax-cuts-dont-lead-to-growth-2012-9


Read, go ahead, Enjoy!

https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=the truth does lowering the corporate tax rate lead to less inequality?

The problem is not just taxes per se. It's the fact that more taxes inevitably mean more government. More government typically means less private sector growth because much of what modern government does is designed to appease radical interest groups and is invariably bad for the economy.

Surely you would agree that there is a level of taxation that is so onerous it impedes growth?

 

[Ricter]

The problem is not just taxes per se. It's the fact that more taxes inevitably mean more government.

That's not a problem if the more government is still the right sized government.

 

[jem]

nitro started this thread and baited the subject.
We will keep pushing until Federal income taxes are eliminated.

I live in california because I was licensed here and because my family and friends live here and its been in 70s and 80s and sunny everyday for the last month.

You live in a high (the highest?) tax state and, year after year, complain monomaniacally about taxes. Where's the personal responsibility you reps are supposed to hold so high? Move.