13-10-2004 02:09									#31
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Inapposite. Prescott's got a Nobel prize to his name.

	13-10-2004 02:17									#32
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I'm all for tax cuts as long as we can pay for them. Unfortunately, the Republican controlled Congress spends money like a crack addict who broke out of rehab so any tax cuts now just balloon the deficit. The problem is borrowed money must be repaid plus interest so right now tax cuts equal long term tax increases.

	13-10-2004 02:44									#33
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quote: Originally posted by DanS Inapposite. Prescott's got a Nobel prize to his name.

Well then, let's just go back to my earlier post & use common sense.

quote: But "in the early nineties the economy was depressed by the tax increase in 1993 by about four percent, and it's right at that level now," Prescott said.

Prescott is under the impression that the economy was depressed by the tax increase of 1993. However, this was the beginning of the most sustained economic growth in human history. For him to be ignorant of this fact would be like a Nobel-winning historian not knowing what Columbus did in 1492.

	13-10-2004 02:51									#34
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I wonder if the thread title was "Nobel Prize winnning Economist slams Bush Tax Cuts for increasing Deficits" the left would have been so quick to slam an entire Academic Discipline.

	13-10-2004 03:08									#35
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quote: Originally posted by Shi Huangdi I wonder if the thread title was "Nobel Prize winnning Economist slams Bush Tax Cuts for increasing Deficits" the left would have been so quick to slam an entire Academic Discipline.

Of course not! Because then he'd have been right!

	13-10-2004 03:18									#36
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quote: Prescott is under the impression that the economy was depressed by the tax increase of 1993.

Um... if the economy was roaring along after 1993, do you really think the Republicans would have swept into power in Congress (for the first time in 40 years!!) in the 1994 election? Of course not. The economy didn't start to begin its assent until mid-late 1995.

quote: I wonder if the thread title was "Nobel Prize winnning Economist slams Bush Tax Cuts for increasing Deficits" the left would have been so quick to slam an entire Academic Discipline.

IIRC, the left has used former Nobel Prize Winners who say Bush's tax cut was not right as evidence that it was a bad idea.

	13-10-2004 03:28									#37
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quote: Originally posted by Imran Siddiqui The economy didn't start to begin its assent until mid-late 1995.

Precisely! When the affects of the 1993 tax increase + the increase in the minimum wage kicked in...building consumer confidence.

	13-10-2004 03:29									#38
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Just another Nobel Laureate calling Bush stupid.

	13-10-2004 03:34									#39
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quote: Precisely! When the affects of the 1993 tax increase + the increase in the minimum wage kicked in...building consumer confidence.

You're kidding? Have any facts to back up that BAM? There is nothing to suggest that tax increases improve economic performance.

I can easily assert that any building of consumer confidence would probably have resulted from the Republicans taking Congress.

	13-10-2004 03:45									#40
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quote: IIRC, the left has used former Nobel Prize Winners who say Bush's tax cut was not right as evidence that it was a bad idea.

You know Imran, I don't your know positions perfectly but I think I have been of the same mindset. I believe that the deficit spending of this administration has been too much, and the deficit was growing at an unacceptable rate. I belive that spending should try to be curtailed, but if that's not possible, taxes should be increased.

Unlike the Left, however, when a Nobel Prize Winning Economist Disagrees with me my automatic reaction is not that I must be right and the Nobel Prize Winning Economist must be wrong, and that the entire field of Economics must be wrong since a nobel prize winner at that field disagreed with me. What we are seeing here on behalf of the Left is the height of arrogance, pride, and intellectual dishonesty.

	13-10-2004 03:57									#41
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Shi: Nonsense. I agree that in order to get the economic up tick the administration was looking for we would have needed a much larger tax cut. This is essentially what Prescott said; all I've said is that given our current budget deficit we couldn't afford to spend the kind of money needed to really jump start the economy post 9/11. I'm in full agreement with Dr. Prescott. The Bush tax cut was to small; only I bow to reality which says money doesn't grow on trees and I acknowedge that it was the largest tax cut we could hope for. What I don't like is how the Republican controlled Congress, fully backed by the Bush administration, has spent like a teenager with daddy's credit card. They've racked up the largest deficits in the history of humanity and they still want to spend more.

Last edited by Oerdin on 13-10-2004 at 04:18

	13-10-2004 03:59									#42
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I'm also sure that Dr. Prescott wouldn't agree with the massive increase in spending that the Bush administration has engaged in (8.5% per year not including military spending, according to factcheck.org).

	13-10-2004 04:00									#43
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quote: Originally posted by Imran Siddiqui [I can easily assert that any building of consumer confidence would probably have resulted from the Republicans taking Congress.

Naw, look what happened to consumer confidence when the Republicans took control of the White House.

	13-10-2004 04:07									#44
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Actually some studies show that Wall Street goes up immediately after Republicans win. That would help pump up consumer confidence.

	13-10-2004 04:26									#45
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I'd say the republican win in the Congress had more to do with the Clinton Administration's fumbling then anything else.

	13-10-2004 04:27									#46
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Oh, I think he would have agreed with the spending and a larger tax cut.

It's called Keyesian economics. You spend a ton of money and cut taxes in a depression, then you pay off the debt when the economy is going strong again by reducing the special spending you did to increase jobs/etc and raising taxes.

So, while he may have agreed with part of Bush's plan and wanted an even larger cut, I think he'd have a major issue with Bush wanting to make that cut permanent.

-Drachasor

	13-10-2004 04:44									#47
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Oerdin: I didn't mean critiques such as yours, I meant people who bashed the entire field of Economics over Dr.Prescott's comments.

	13-10-2004 05:40									#48
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quote: Originally posted by Drachasor Oh, I think he would have agreed with the spending and a larger tax cut. It's called Keyesian economics. You spend a ton of money and cut taxes in a depression, then you pay off the debt when the economy is going strong again by reducing the special spending you did to increase jobs/etc and raising taxes. So, while he may have agreed with part of Bush's plan and wanted an even larger cut, I think he'd have a major issue with Bush wanting to make that cut permanent. -Drachasor

No. He's a supply-sider. He says something about tax cuts encouraging people to work.

	13-10-2004 05:42									#49
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quote: Originally posted by Imran Siddiqui Actually some studies show that Wall Street goes up immediately after Republicans win. That would help pump up consumer confidence.

I guess those studies don't go by recent history.

	13-10-2004 06:18									#50
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quote: Originally posted by Kidicious No. He's a supply-sider. He says something about tax cuts encouraging people to work.

Tax cuts do encourage people to work. A tax cut is the same as a wage raise for workers.

	13-10-2004 06:23									#51
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quote: Originally posted by Jaguar Tax cuts do encourage people to work. A tax cut is the same as a wage raise for workers.

Assuming the tax cuts go to the wage earner. Bush's plan is to give the tax cuts to the ultra wealthy with the hope that some of it trickles down to the middle class.

Meanwhile, government programs such as public education, trauma centers and road construction are dying due to lack of funding.

	13-10-2004 06:38									#52
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The wealthiest one percent don't earn wages? They just somehow pull money out of the air?

	13-10-2004 06:44									#53
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Sure...capital gains, inheritance, stock dividends. It's called "unearned income" and surprisingly enough, it's taxed at a lower rather than "earned income."

	13-10-2004 06:44									#54
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quote: Originally posted by Zkribbler Assuming the tax cuts go to the wage earner. Bush's plan is to give the tax cuts to the ultra wealthy with the hope that some of it trickles down to the middle class. Meanwhile, government programs such as public education, trauma centers and road construction are dying due to lack of funding.

Meanwhile, a tiny violin is playing. If you haven't noticed, it's the people who are Ultra wealthy who invest the most in companies, especially the ones who who tend to make huge breakthroughs in technology. And, it's the almost wealthy who own the S Corporations that employ a vast amount of people. The profits from the corporation flow directly to them, on their individual tax return. Oddly enough, they tend to make over $200k a year.

It's the tax code people! Learn it!

	13-10-2004 06:45									#55
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quote: It's called Keyesian economics.

Prescott isn't a Keynsian economist, as far as I know.

One of Prescott's theses is that high taxes discourage people from working as many hours as they would under normal circumstances. I guess this impact seems obvious, but I don't know how much of an impact it would have. Prescott suggests that most of the difference between how much Americans work and how much Europeans work is due to higher taxes paid by Europeans.

So he would likely encourage Bush to make the cuts permanent in addition to encouraging larger cuts.

	13-10-2004 06:46									#56
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quote: Originally posted by Harry Tuttle And, it's the almost wealthy who own the S Corporations that employ a vast amount of people. The profits from the corporation flow directly to them, on their individual tax return. Oddly enough, they tend to make over $200k a year.

Only 17% of the small business owners are above the $200,000 income level.

	13-10-2004 06:48									#57
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quote: Originally posted by Zkribbler Only 17% of the small business owners are above the $200,000 income level.

and how many people do they employ? How much have they invested in their companies? How much risk have they undertaken?

	13-10-2004 06:51									#58
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quote: Originally posted by Zkribbler Sure...capital gains, inheritance, stock dividends. It's called "unearned income" and surprisingly enough, it's taxed at a lower rather than "earned income."

But the Bush tax cut reduces taxes on earned income. So what you're doing is just ranting about how you're jealous of rich people, and directing some of that at Bush irrationally.

	13-10-2004 06:52									#59
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Prescott's work is part of the continuing effort to integrate microeconomics (behavior of individual consumers and firms) with macroeconomics (study of the economy as a whole). Part of Prescott's contribution is the observation that just as lower taxes on capital result in more savings and less consumption, boosting the longrun growth of the economy, lower taxes on labor result in more labor and less leisure, again boosting the longrun growth of the economy. http://research.mpls.frb.fed.us/research/qr/qr1042.pdf , p. 1

This labor substitution effect is larger than the capital substitution effect because labor's share of income in the US economy is about twice the size of capital's share.
http://research.mpls.frb.fed.us/research/qr/qr1421.pdf , p. 10

Moreover, Prescott also observes that "hours of less skilled workers are much more variable" than those of higher skilled workers. (same link, p. 11)

In other words, tax cuts for lower income workers have a greater long-run effect on the growth of the economy through increased labor supply than those for higher income workers through increased savings. Prescott's work therefore appears to indicate that the "too small" comments as applying to the lower and middle class, exactly the opposite of what most people in this thread seem to have their knickers in a twist about.

Now that this lynch mob has given Professor Prescott a "fair" trial, you may procede with the hanging.

Thanks to DanS for the great links from the other Nobel thread. http://apolyton.net/forums/showthre...19&pagenumber=2

	13-10-2004 06:54									#60
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Taxes are really really low historically. What is the guy saying that taxes aren't low enough to accomplish?