I wasn't commenting on protectionism, it was not a relevant topic. The unemployment, again, was a symptom. My statements was comparing our situation to the start of the great depression EXCEPT instead of ignoring it and acting like everything would be fine if some huge banks failed we prevented their failure. A great many economists consider the bank failures and the coinciding stock market crash as the primary cause of the Great Depression - and logic would bear this out. [A lot of "wealth" in the stock market evaporating due to a lot of "real wealth" ie bank deposits evaporating wiping out the entire savings of a great many individuals and companies].
Did protectionism worsen the situation once the ball got rolling downhill? yes was it the primary cause? no
We're not talking about exacerbating factors here - we're taking about primary antecedents.
I'm NOT Saying the Laffer curve doesn't have an area in which what you are claiming is true, however it's downright dishonest to claim we're anywhere near it.
You're right, taxes CAN be too high: I never disagreed with that idea. I agree with that idea, only an idiot wouldn't. However CBO reports indicate that we're nowhere near that. Not only is the top-level marginal tax rate only around 36% but very few rich people pay anywhere near that much as they can afford lawyers to exploit every tax loophole.
and the best estimates say in the US That it might be as high as 80%
no matter what point the optimal point is the CBO has determined fairly reliably that we're left of that point of the curve, significantly. If you want to argue for tax reductions then do it, but atleast be honest and stop misrepresenting the Laffer Curve, you only do disservice to your own position.
oh PS unemployment was a SYMPTOM not a CAUSE. Don't confuse what the antecedent is.
From Wikipedia: "The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries."
Starting in 1929.. With the stock market crash. You cite unemployment 4 years later.
dont misrepresent my statements. you're smarter than that.
i said if we LET THEM. preventing bank failures while it bails out said douchebags mitigates the severity of the downturn. Te solution to this situation is A) prevent rampant bank failures B) reinstate the very effective regulations that prevented this from happening for 50 years before they started being gutted (almost immediately resulting in the Savings and Loan Crisis
When I was saying I cannot believe some people would let this happen it was two fold: first I cannot believe people were dumb enough to lift those regulations [actually I can, because the religion of the free market was involved], second I cannot believe people cant see past [the admittedly sucky fact] that we're having to bail out douchebags to save everyone else from worse.
PS the definition of depression is four consecutive quarters of GDP shrinkage. we're had that - so this is a depression, even if we've PREVENTED it from becoming much much much worse with this "bailout"
The congressional budget office, which in 2005 placed us on the curve where a X reduction in total tax due to decrease in marginal tax rate only spurs enough growth to regain.28X of that back.
Fox News SPONSORED no less than four of those protests. If you want to cite your claims on CNN I'm more than happy to believe them - CNN is a slight-right of center (by RATIONAL definitions of center, not the american definition of "between conservative and ultraconservative") which very little bias according to reputable research (like Pew) whereas Fox has a well documented and clear bias with measurable results in the manipulation of it's audience.
Assuming I'm a big fan of CNN because I dislike Fox is a pretty big mistake. Crying "liberal media" is a bigger one. Read some academic studies.
The Laffer Curve also doesn't mean "lower taxes are better" it's about the tax rate which maximizes revenue above that rate you get a disincentive to work because the marginal tax rate is too high, below that rate and you are not utilizing your tax base to it's fullest.
A Study by the CBO in 2005 says that we're on the point of the Laffer curve (left side) where a tax reduction is only recuperated at a rate of about 28%. Ie you cut the tax rate by X and you get growth in the economy that only gets you a.28X increase in tax revenue. This would indicate that we're significantly below the maximum utilization point and therefore are on a part of the curve that does not support what you are trying to imply (that we should lower taxes).
Some economists estimate that the maximum utilization rate in the United States may be as high as 80%. [I won't disagree with the idea that in the past we had marginal rates that crossed to the right side - like 90% marginal for the top bracket clearly goes there]
In fact the old soviet union was a prime example of operating on the right side of the LC - where the government was above it's maximum utilization point and was harming the economy.
This is all assuming that all of the assumptions of the Laffer Curve are valid - and while the Laffer curve, in general, seems to hold water it's extreme cases haven't been tested to see how well the entire curve holds up in real world situations.
And this is all information i easily could find just pulling up wikipedia and only listening to parts with citations.
don't confuse "considered and rejected as laughably incorrect" with closed mind my friend.
The generally consensus, supported by real world data, that i have seen has said the laffer curve is only valid somewhere above 60% marginal max tax rate, and only noticable if you drop that tax rate significantly. If you let your top marginal tax rate fall below a certain level you then start to perform wealth redistribution from the poor to the rich as the rich gain more benefit per tax dollar than the poor.
and the fact is that while we did force Fannie and Freddie to issue mortgages now called "subprime" it was the mortgages we forced them to issue that was the problem.. a majority of the loans they issued were suppose to be non-subprimes so that they could absorb what losses they incurred in subprimes. this system worked for a long time until the housing market boom and every body from the brokers who lied to the customer and the bank to the bank CEOs became greedy fucks and stop doing their jobs: risk management.
blaming the senate for anything other than deregulation in this situation is dishonest. You pointed that out to GP but I wanted to reiterate the point that it wasn't the senators fault in the design of Fannie and Freddie.
>The level of military spending we have now is pork.
that i agree with in spirit - but the technical definition of pork as used (misused?) by the media and senators doesn't include it
> Those banks that did not make bad loans would still be standing after the dust settled. The bailout of those banks that did make bad loans gave them an advantage over good banks.
and in the mean time the entire economy goes to shit, i cannot believe people honestly think we should let a few douchebags send us into Great Depression 2.0 when we can prevent it and then regulate the fuck out of them to prevent it from happening again. Those regulations do work, we just gutted them over the last 25-30 years.
> Let them go bankrupt and or break them up so they're not "too big to fail".
as for letting them die see previous, as for breaking them up - exactly.
yes if there are banks "Too big to fail", that is why i mentioned the regulations - those prevented A) banks too big to fail B) banks getting into the situation they just got themselves into
if you let the banks fail you're have A, gauranteed. You don't want A. A is WWAAAY worse than B.
pork accounts for less than 2% of the federal budget.
unless you define "anything but military spending" as pork, but then I cannot help if someone is nutso.
I'm not saying the banks misbehaved, in fact pretty much everybody (congress and POTUS included) say they did. We were left with three choices
A) let them fail and probably end up in Great Depression 2.0 B) give them low-interest loans till they can recover and pay us back [what we did] even knowing that to a certain extent they're going to be douchnozzles with some of it C) nationalize them to prevent their failure
we choose B.. with B we need to add B-prime which is B-prime) reinstate the post-Great Depression banking regulations which had stopped the "boom and bust" cycle until they started to get dismantled in the 80s by Reaganomics.
you can't be serious.... oh wait you already cited the laffer curve without the caution that it's only valid for certain ranges. Dude just the other week I thought you were a pretty reasonable guy and now here you are spouting stuff that only someone that's brain is switched off could believe.
actually im fairly certain it was Fox news doing all that they coudl to take ownership of the movement that gave it the right-wing stench, nothing any major democrat did.
as one of the most fiscally "conservative" senators recently said "attempting to balance the budget during a recession is not adviseable" (or something along those lines)
the last time we were in this situation and we ignored it we ended up in the great depression, in the long run these LOANS the government cranked out will probably turn a profit.
Slashdot Mirror
you're assuming that it is a real gmail address not just one that is going to bounce.
um... how is mail coming from Yahoo the fault of google?
I wasn't commenting on protectionism, it was not a relevant topic. The unemployment, again, was a symptom. My statements was comparing our situation to the start of the great depression EXCEPT instead of ignoring it and acting like everything would be fine if some huge banks failed we prevented their failure. A great many economists consider the bank failures and the coinciding stock market crash as the primary cause of the Great Depression - and logic would bear this out. [A lot of "wealth" in the stock market evaporating due to a lot of "real wealth" ie bank deposits evaporating wiping out the entire savings of a great many individuals and companies].
Did protectionism worsen the situation once the ball got rolling downhill? yes
was it the primary cause? no
We're not talking about exacerbating factors here - we're taking about primary antecedents.
as cited by wiki http://www.cbo.gov/ftpdocs/69xx/doc6908/12-01-10PercentTaxCut.pdf
I'm NOT Saying the Laffer curve doesn't have an area in which what you are claiming is true, however it's downright dishonest to claim we're anywhere near it.
You're right, taxes CAN be too high: I never disagreed with that idea. I agree with that idea, only an idiot wouldn't. However CBO reports indicate that we're nowhere near that. Not only is the top-level marginal tax rate only around 36% but very few rich people pay anywhere near that much as they can afford lawyers to exploit every tax loophole.
and the best estimates say in the US That it might be as high as 80%
no matter what point the optimal point is the CBO has determined fairly reliably that we're left of that point of the curve, significantly. If you want to argue for tax reductions then do it, but atleast be honest and stop misrepresenting the Laffer Curve, you only do disservice to your own position.
oh PS unemployment was a SYMPTOM not a CAUSE. Don't confuse what the antecedent is.
From Wikipedia: "The Great Depression was a worldwide economic downturn starting in most places in 1929 and ending at different times in the 1930s or early 1940s for different countries."
Starting in 1929.. With the stock market crash. You cite unemployment 4 years later.
dont misrepresent my statements. you're smarter than that.
i said if we LET THEM. preventing bank failures while it bails out said douchebags mitigates the severity of the downturn. Te solution to this situation is
A) prevent rampant bank failures
B) reinstate the very effective regulations that prevented this from happening for 50 years before they started being gutted (almost immediately resulting in the Savings and Loan Crisis
When I was saying I cannot believe some people would let this happen it was two fold: first I cannot believe people were dumb enough to lift those regulations [actually I can, because the religion of the free market was involved], second I cannot believe people cant see past [the admittedly sucky fact] that we're having to bail out douchebags to save everyone else from worse.
PS the definition of depression is four consecutive quarters of GDP shrinkage. we're had that - so this is a depression, even if we've PREVENTED it from becoming much much much worse with this "bailout"
so you're arguing against a claim that nobody here made?
Sure the OP of that statement's analysis is extremely overly simplistic - but it is accurate.
lower marginal tax rates and higher spending help stimulate the economy in a downturn.
in a boom higher marginal tax rates are sustainable without harming the economy.
The congressional budget office, which in 2005 placed us on the curve where a X reduction in total tax due to decrease in marginal tax rate only spurs enough growth to regain .28X of that back.
Fox News SPONSORED no less than four of those protests. If you want to cite your claims on CNN I'm more than happy to believe them - CNN is a slight-right of center (by RATIONAL definitions of center, not the american definition of "between conservative and ultraconservative") which very little bias according to reputable research (like Pew) whereas Fox has a well documented and clear bias with measurable results in the manipulation of it's audience.
Assuming I'm a big fan of CNN because I dislike Fox is a pretty big mistake. Crying "liberal media" is a bigger one. Read some academic studies.
he was a republican, he did support it. Republicans don't admit that their party are the bigger porksters.
The Laffer Curve also doesn't mean "lower taxes are better" it's about the tax rate which maximizes revenue above that rate you get a disincentive to work because the marginal tax rate is too high, below that rate and you are not utilizing your tax base to it's fullest.
A Study by the CBO in 2005 says that we're on the point of the Laffer curve (left side) where a tax reduction is only recuperated at a rate of about 28%. Ie you cut the tax rate by X and you get growth in the economy that only gets you a .28X increase in tax revenue. This would indicate that we're significantly below the maximum utilization point and therefore are on a part of the curve that does not support what you are trying to imply (that we should lower taxes).
Some economists estimate that the maximum utilization rate in the United States may be as high as 80%.
[I won't disagree with the idea that in the past we had marginal rates that crossed to the right side - like 90% marginal for the top bracket clearly goes there]
In fact the old soviet union was a prime example of operating on the right side of the LC - where the government was above it's maximum utilization point and was harming the economy.
This is all assuming that all of the assumptions of the Laffer Curve are valid - and while the Laffer curve, in general, seems to hold water it's extreme cases haven't been tested to see how well the entire curve holds up in real world situations.
And this is all information i easily could find just pulling up wikipedia and only listening to parts with citations.
don't confuse "considered and rejected as laughably incorrect" with closed mind my friend.
The generally consensus, supported by real world data, that i have seen has said the laffer curve is only valid somewhere above 60% marginal max tax rate, and only noticable if you drop that tax rate significantly. If you let your top marginal tax rate fall below a certain level you then start to perform wealth redistribution from the poor to the rich as the rich gain more benefit per tax dollar than the poor.
and the fact is that while we did force Fannie and Freddie to issue mortgages now called "subprime" it was the mortgages we forced them to issue that was the problem.. a majority of the loans they issued were suppose to be non-subprimes so that they could absorb what losses they incurred in subprimes. this system worked for a long time until the housing market boom and every body from the brokers who lied to the customer and the bank to the bank CEOs became greedy fucks and stop doing their jobs: risk management.
blaming the senate for anything other than deregulation in this situation is dishonest. You pointed that out to GP but I wanted to reiterate the point that it wasn't the senators fault in the design of Fannie and Freddie.
>The level of military spending we have now is pork.
that i agree with in spirit - but the technical definition of pork as used (misused?) by the media and senators doesn't include it
> Those banks that did not make bad loans would still be standing after the dust settled. The bailout of those banks that did make bad loans gave them an advantage over good banks.
and in the mean time the entire economy goes to shit, i cannot believe people honestly think we should let a few douchebags send us into Great Depression 2.0 when we can prevent it and then regulate the fuck out of them to prevent it from happening again. Those regulations do work, we just gutted them over the last 25-30 years.
> Let them go bankrupt and or break them up so they're not "too big to fail".
as for letting them die see previous, as for breaking them up - exactly.
you keep ignoring the effect of their failure, that's dishonest.
yes if there are banks "Too big to fail", that is why i mentioned the regulations - those prevented
A) banks too big to fail
B) banks getting into the situation they just got themselves into
if you let the banks fail you're have A, gauranteed. You don't want A. A is WWAAAY worse than B.
i'm not saying there was no pork, im saying that you're blowing it massively out of proportion.
yes but if there are some regulation (ie cannot be higher than X inches) they still have to mow that.
pork accounts for less than 2% of the federal budget.
unless you define "anything but military spending" as pork, but then I cannot help if someone is nutso.
I'm not saying the banks misbehaved, in fact pretty much everybody (congress and POTUS included) say they did. We were left with three choices
A) let them fail and probably end up in Great Depression 2.0
B) give them low-interest loans till they can recover and pay us back [what we did] even knowing that to a certain extent they're going to be douchnozzles with some of it
C) nationalize them to prevent their failure
we choose B.. with B we need to add B-prime which is
B-prime) reinstate the post-Great Depression banking regulations which had stopped the "boom and bust" cycle until they started to get dismantled in the 80s by Reaganomics.
it was a no-win situation.
you can't be serious.... oh wait you already cited the laffer curve without the caution that it's only valid for certain ranges. Dude just the other week I thought you were a pretty reasonable guy and now here you are spouting stuff that only someone that's brain is switched off could believe.
actually im fairly certain it was Fox news doing all that they coudl to take ownership of the movement that gave it the right-wing stench, nothing any major democrat did.
as one of the most fiscally "conservative" senators recently said "attempting to balance the budget during a recession is not adviseable" (or something along those lines)
the last time we were in this situation and we ignored it we ended up in the great depression, in the long run these LOANS the government cranked out will probably turn a profit.
laffer curve is only valid for extremely high tax rates (>~60% marginal)