POLL: Do you believe that supply-side economics is legitimate economic theory?

[IShopAtPublix]

Quote from bkveen3:

Quote from IShopAtPublix:

Regardless of whether you are indeed going to be attending upenn, you parrot empty slogans polished by the republican party.

Investing needs pre existing demand, otherwise you will simply go into debt or spend cash and go bankrupt. I don't hear best buy going on a building spree. Cutting taxes deeply now will only make US go into more debt and potentially result in a default (could happen as well through obama's plan)

Actual wealth of people depends on growth of money supply vs growth in inflation. Tax cuts simply redistribute existing bank notes (or digital currency). That is why tax cuts the way people imagine on the republican side will never work. [/QUOTE

You assume that we maintain the same amount of government spending and cut taxes. My assertion is that it spending is unsustainable in any scenario. One third of the country is employed by the government in some fashion. That is absolutely ridiculous. The best scenario is to cut spending(drastically), cut taxes and start letting markets step in where the government had previously been functioning. We got along fine before the government did everything for us. But to raise taxes, increase spending, AND run a deficit of over 4% yearly GDP, well that's just not a good idea no matter what school of thought you subscribe to.

You are arguing with ghosts. US has been dealing with financial alchemy for some time. I don't like keynes and I dont like supply side. If you take Austrian economics, strip it of silly references to libertarianism and gold standard you will have something that approaches my philosophy.

US cannot and will not be able to sustain it is military hegemony and Medicare/medicaid social security. Those entitlements need to be phased out which won't happen with present breed of politicians. The can will get kicked down the road.

 

[achilles28]

Quote from bkveen3:

But again this makes our economy dependent on consumer spending. It is healthier to have an economy of less consumerism and more investment in the future. Things like research and development which will keep our country at the forefront of the world for years to come. Simply increasing consumer spending is too short sighted. Its treating the symptoms of the disease and not the actual problem.

You got it.

Wealth is created by supply-side economics. I think the OP's confusion here, is a semantic one.

Supply-side economics is technology and innovation. Cheaper goods at static margins = higher standard of living.

Money is just a relative scorekeeper and has no intrinsic value in and of itself.

Its what that money can buy, which is so important.

Technology and innovation drives down product cost while maintaining or improving profitability. Everyone wins.

Consumption is a demand-side driver to production, although not a determinant to R&D investment.

A good example is when "post-industrial" nations exported their manufacturing base overseas.

There was no technological advantage to be gained by overseas production. Rather, the goal was to exploit cheap labor.

A generation of costly R&D investment was avoided by shipping factories overseas. This was done at the behest of Multinationals who lobbied congress to surrender their protectionist ideals and remove tariffs on foreign goods. Once done, the fate of America's Middle Class was sealed.

The problem with the political-economy is the Sheep are too stupid to know whats good for them. And the Smart Money holds the Law Makers in their pocket via Lobbying Power.

To bring about the next Industrial Renaissance, the most powerful Corporations in the United States would take huge losses on abandoned overseas capital and reinvestment in R&D - then more capital - at home.

They won't allow this to happen.

 

[MGB]

Quote from bkveen3:
You assume that we maintain the same amount of government spending and cut taxes.

Exactly. Reduce taxes AND reduce government spending.

Quote from bkveen3:
One third of the country is employed by the government in some fashion. That is absolutely ridiculous.

Agreed. Quite ridiculous.

 

[MGB]

Quote from volente_00:
Or cut the rates on lower, middle class to stimulate spending which in return creates new jobs from the increase in demand for products and services.

I would have a single tax bracket of 10% for all taxpayers.

Then adjust the government spending to fit the expecting incoming tax revenues from the single tax bracket of 10%.

 

[MGB]

Quote from IShopAtPublix:
If you take Austrian economics, strip it of silly references to libertarianism and gold standard you will have something that approaches my philosophy.

I'm curious. Tell us more about Austrian economics.

The Australian income tax is a progressive tax. The current tax-free threshold is $6,000, and the highest marginal rate for individuals is 45%.

The corporate tax rate is a flat 30%.

Capital gains are taxes at the individual's income tax rate.

What appeals to you about the Austrian tax system?

 

[IShopAtPublix]

Quote from MGB:

Quote from IShopAtPublix:
If you take Austrian economics, strip it of silly references to libertarianism and gold standard you will have something that approaches my philosophy.
QUOTE]

I'm curious. Tell us more about Austrian economics.

The Australian income tax is a progressive tax. The current tax-free threshold is $6,000, and the highest marginal rate for individuals is 45%.

The corporate tax rate is a flat 30%.

Capital gains are taxes at the individual's income tax rate.

What appeals to you about the Austrian tax system?

LoL. Austrian school of economics is the name of a particular way of thought as opposed to actual economic regime in austria. There is also chicago school of economics, etc.

 

[MGB]

Quote from volente_00:
Trickle down fails because in the end, the business owner is not going to increase the amount employees just because he pays less tax. He will only increase labor when demand is rising or in anticipation of it.

Ok, to increase labor, we need to increase demand. What will increase the demand?

Impose higher taxes (and less money in my pocket to spend)?

Impose lower taxes (and more money in my pocket to spend)?

 

[MGB]

Quote from IShopAtPublix:
LoL. Austrian school of economics is the name of a particular way of thought as opposed to actual economic regime in austria. There is also chicago school of economics, etc.

In that case, the Austrian school of economics advocates entrepreneurship as the driving force in economic development. They see private property as essential to the efficient use of resources, and usually (if not always) see government interference in market processes as counterproductive.

 

[Cutten]

Quote from jueco2005:

I disagree with both.

Ok - what is your reason for thinking production won't increase when the incentive to produce is higher?

And what is your reason for thinking that there isn't an optimal tax rate, or at least a range of optimal tax rates?

 

[Cutten]

Quote from IShopAtPublix:

Tax rates are not some magic wand because there is no free lunch. You make deep tax cuts and the federal budget goes into red. Paying interest on national debt fits nobody's definition of economic efficiency. You make it sound like the country can eat its cake and have it too. Can't happen.

Russia cut tax rates deeply under Putin and the income tax revenues as a % of GDP increased over 20%.

Please stop telling deliberate lies.