13-10-2004 10:36									#91
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STILL no comment on Kerry wanting to balance the budget during a recession?

I give you Martin van Buren and Herbert Hoover. What do they have in common with Kerry?

	13-10-2004 10:37									#92
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They were silenced by their own goal.

	13-10-2004 10:44									#93
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Herbert Hoover expanded the deficit to a level not seen in peace time. His Reconstruction Finance Corporation was criticized by FDR, who originally said he'd cut the massive increases in government spending that Hoover started. Once in office, Roosevelt reversed his position.

Oh, and btw, we've been out of a recession for a while.

	13-10-2004 10:56									#94
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Well, seems that perhaps the economics professor found that the tax break on the middle-class and lower was far too little.

It really does make sense. I remember back when I was making minimum wage (about $5 an hour). I really felt like the work I put in wasn't worth the time, and I didn't try to work a lot more. Now that I make quite a bit more (different job), spending time working produces a more noticeable benefit, so I am encouraged to work even more.

This isn't the much derided trickle-down economics. This is about directly reducing the taxes on the middle-class and lower classes (I'll refer to this as the sub 200k range). This makes sense in so many more ways. For one, the sub 200k range spends money much more easily; if you give them a tax break, that money is going to go directly into the economy and businesses will benefit. They will also be encouraged to work more, which helps the economy too.

Makes a lot of sense to me.

In other news, I did some research and apparently Keynsian Economics was descredited in the 70s or so. It seems economies are too dynamic and random for it to really work. (The more you know.). Interesting, eh?

-Drachasor

PS. Hard to believe the communists are against tax breaks for labor. Are they pro tax breaks for business? Do they think there should never be tax breaks? What is going on?

	13-10-2004 10:59									#95
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Yeah, the Monetarists (led by Friedman) helped to bring down the Keynesian grip on American economic politics. Fun guys to read.

	13-10-2004 12:29									#96
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quote: Originally posted by Imran Siddiqui Oh, and btw, we've been out of a recession for a while.

Indeed,

According to the OECD and IMF the US is likely to be at around it's trend level of GDP this year.

This seems to have been masked from the public at large by the large changes that are going on in the US labour market; it appears to have moved to a low employment growth/high productivity growth model - much like Europe had before the mid 1990s or the US had before the mid 1960s

So if you want to have a balanced budget over the economic cycle it should be in balance now - not in deficit to the tune of 5% of GDP!

	13-10-2004 12:40									#97
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quote: Originally posted by Adam Smith 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

haha, this is almost exactled what i was gonna say (the part thats bolded)

	13-10-2004 13:12									#98
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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."

You're right and this is my main grip with the Republican version of tax cuts. The Republicans want to eliminate the inheritance tax, slash the capital gains tax, and kill the alternate minimum tax while creating a new national sales tax. The problem is this means the ultra wealthy that make their money from stocks and capital investment will end up paying almost no taxes plus since there won't be an inheritance tax we will see the creation of a rigid, permanent upper class.

The national sales tax will shift the tax burden even more to wage earners and away from people who make their living off of unearned income. I like to think of America as a meritocracy where people get ahead based upon their hard work and good ideas not because of who their grandfathers were. A well designed inheritance tax does that by letting the family farm go to the next generation but not letting the Rockefellers or the Gates' become a permanent aristocracy.

	13-10-2004 13:21									#99
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quote: Originally posted by St Leo Uh, sane people don't work more than 40 hours a week voluntarily as long as they already earn enough for the necessities.

I know lots of sane people who voluntarily work more then 40 hours per week. Most of them have families and they believe that by putting in long hours now they'll be able to save up a nest egg and then let compound interest do the work for them.

	13-10-2004 13:29									#100
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quote: Originally posted by chegitz guevara This isn't really true. When you make less, each dollar you make becomes more precious. When you make more, you can afford to take more time off.

But more money makes for higher quality time off -- better toys, more travel, etc. So for me, it really does matter if the money I'll make working an extra hour is worth the extra hour I'll lose for playtime. More money per hour worked = better toys in less time.

	13-10-2004 13:35									#101
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quote: Originally posted by chegitz guevara I don't know about you, but fear of homelessness and losing all my stuff is what motivates me to work. All a tax cut means is I don't have to work as much, because I'll take home the same pay for less work. Tax cuts promote laziness. If you want to promote work, you should take away enough money in taxes that people have to work three jobs just to stay in a freezing shack.

Che: I think you might be a minority here. Most people I know don't want to just maintain their standard of living; they want to increase it. They want a bigger car, a bigger house in a better neighborhood, they want their kids to go to better schools (which means private schools), they want to finally buy the wife that diamond necklace, and to take that trip to Europe.

Most people work hard to improve their standard of living and by making work more financially rewarding, i.e. letting people keep more of what they earn, we create an incentive to work.

	13-10-2004 17:25									#102
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quote: Originally posted by Shi Huangdi Oerdin: I didn't mean critiques such as yours, I meant people who bashed the entire field of Economics over Dr.Prescott's comments.

Especially when any number of them are willing to quote Krugman. Another hypocracy revealed.

	13-10-2004 17:35									#103
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quote: Originally posted by Oerdin You're right and this is my main grip with the Republican version of tax cuts. The Republicans want to eliminate the inheritance tax, slash the capital gains tax, and kill the alternate minimum tax while creating a new national sales tax. The problem is this means the ultra wealthy that make their money from stocks and capital investment will end up paying almost no taxes plus since there won't be an inheritance tax we will see the creation of a rigid, permanent upper class. The national sales tax will shift the tax burden even more to wage earners and away from people who make their living off of unearned income. I like to think of America as a meritocracy where people get ahead based upon their hard work and good ideas not because of who their grandfathers were. A well designed inheritance tax does that by letting the family farm go to the next generation but not letting the Rockefellers or the Gates' become a permanent aristocracy.

Oerdin, what is better, having a flatter tax with no loopholes or a steep progressive rate with plenty of loopholes? IIRC, Kerry made $7 million last year and paid only 12.5% tax.

This class warfare crap is pure envy. The only thing people should be concerned about is what tax structure is best for the economy. When one introduces socialism into the mix, one gets far from ideal economic performance. Look at Cuba.

	13-10-2004 19:24									#104
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quote: Originally posted by Imran Siddiqui Yeah, the Monetarists (led by Friedman) helped to bring down the Keynesian grip on American economic politics. Fun guys to read.

That's why we still target the money supply with monetary policy and balance the budget during recessions?

	13-10-2004 19:28									#105
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quote: Originally posted by Oerdin Che: I think you might be a minority here. Most people I know don't want to just maintain their standard of living; they want to increase it. They want a bigger car, a bigger house in a better neighborhood, they want their kids to go to better schools (which means private schools), they want to finally buy the wife that diamond necklace, and to take that trip to Europe. Most people work hard to improve their standard of living and by making work more financially rewarding, i.e. letting people keep more of what they earn, we create an incentive to work.

So taxing people encourages them to quit working as much.

What the hell makes people fall for this nonsense I will never know.

	13-10-2004 19:32									#106
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quote: Originally posted by The Mad Monk But more money makes for higher quality time off -- better toys, more travel, etc. So for me, it really does matter if the money I'll make working an extra hour is worth the extra hour I'll lose for playtime. More money per hour worked = better toys in less time.

People make a trade off between work and play time. The more money they make at work the more they will prefer play time because of diminishing utility. This is basic neoclassical theory.

	13-10-2004 19:36									#107
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Another non-issue, as there is no such thing as a Nobel prize in economics!

	13-10-2004 19:43									#108
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quote: Originally posted by Imran Siddiqui You MUST be kidding me. Obviously you are not aware of what lawyers, doctors, and businessmen do. A lot of them work 60-80 hours a week, even though they could live on less.

My doctor closes office at 5pm on the dot, and he doesn't try to squeez in any patients when his schedule is full. As a matter of fact the last time I needed a lawyer it was the same way. Ah, and managers of places that I have worked they stayed there with us until all the work was done, NOT!

	13-10-2004 20:31									#109
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quote: Originally posted by Oerdin I know lots of sane people who voluntarily work more then 40 hours per week. Most of them have families and they believe that by putting in long hours now they'll be able to save up a nest egg and then let compound interest do the work for them.

Saving for retirement is a necessity. The question is do they work beyond that.

	13-10-2004 20:40									#110
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quote: Originally posted by Zkribbler Col. Custer went to West Point and was a professional military commander. But I would question his competence as well.

William Shockley thought blacks were dumber than whites.

And he got a Nobel prize in a real science (physics), not in a pseudoscience.

	13-10-2004 20:45									#111
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Again, inapposite. The thing for which he got his Nobel had nothing to do with his views on comparative intelligence among races.

	13-10-2004 20:50									#112
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quote: Originally posted by Imran Siddiqui You MUST be kidding me. Obviously you are not aware of what lawyers, doctors, and businessmen do. A lot of them work 60-80 hours a week, even though they could live on less.

This is rather unfair.

First of all, businessmen are not workers.

Secondly, lawyers are under time pressure to complete tasks because they have deadlines to meet. Ditto with doctors. However, they don't work 60-80 hours weeks all years around. They don't average to much more than 40 hour weeks. Much less for senior partners.

	13-10-2004 20:52									#113
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quote: Originally posted by DanS Again, inapposite. The thing for which he got his Nobel had nothing to do with his views on comparative intelligence among races.

At least you agreed that ecnomics is a pseudoscience.

	13-10-2004 20:53									#114
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Hey, you can fight it out with AS on that score. I don't care if it's a pseudo-science or not.

I was conceding the point for the sake of argument.

	13-10-2004 20:55									#115
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quote: Originally posted by Kidicious My doctor closes office at 5pm on the dot, and he doesn't try to squeez in any patients when his schedule is full. As a matter of fact the last time I needed a lawyer it was the same way. Ah, and managers of places that I have worked they stayed there with us until all the work was done, NOT!

You have no idea how much paper-work they do, and there is alway the fact he could be working for a hospital or something as well. I am sure he closes early because he wants to get the paper-work done though.

-Drachasor

	13-10-2004 21:00									#116
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quote: Originally posted by Ned Oerdin, what is better, having a flatter tax with no loopholes or a steep progressive rate with plenty of loopholes? IIRC, Kerry made $7 million last year and paid only 12.5% tax. This class warfare crap is pure envy. The only thing people should be concerned about is what tax structure is best for the economy. When one introduces socialism into the mix, one gets far from ideal economic performance. Look at Cuba.

So, Kerry wanting to close loop-holes and Bush not wanting to is a reason to vote for Bush then?

"Class Warfare Crap" is not always pure envy. There are legitmate imbalances and problems with the tax code and how people should be taxed. For one, the Sub $200k bracket needs more of their money spent on basic needs (percentage-wise) than the richer brackets. A progressive code simply takes this into account. Naturally you need to be careful about how much you tax and the economic effects thereof, but a progressive tax simply makes good sense.

And, according to the Econ Nobel holder, lower taxes for the working class encourages them to work more and spurs the economy.

-Drachasor

	13-10-2004 21:03									#117
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quote: Originally posted by Urban Ranger At least you agreed that ecnomics is a pseudoscience.

Well, I disagree with this. Economics is a social science, which means it is a "soft science." Social Sciences are notoriously for being problematic at figuring everything out. Just look at psychology as an example of this.

That said, Economists don't have the job of deciding the social and economic priorities of a culture, but they can help decide the best way to acheive a particular set of priorities; from the basis of how the government should influence economic matters. However, some do put their own political stance into their advice.

-Drachasor

	13-10-2004 21:11									#118
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quote: Originally posted by Drachasor You have no idea how much paper-work they do, and there is alway the fact he could be working for a hospital or something as well. I am sure he closes early because he wants to get the paper-work done though. -Drachasor

Does he deliver newspapers in the morning or take a part-time job after hours like the working poor do?

	13-10-2004 21:15									#119
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quote: Originally posted by Drachasor That said, Economists don't have the job of deciding the social and economic priorities of a culture, but they can help decide the best way to acheive a particular set of priorities; from the basis of how the government should influence economic matters. However, some do put their own political stance into their advice. -Drachasor

All I can say is that you are dead wrong. They all put their political stance into their advice. Economics is nothing more than politics.

	13-10-2004 21:17									#120
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quote: Originally posted by Kidicious Does he deliver newspapers in the morning or take a part-time job after hours like the working poor do?

You knowledge of how much work a doctor has to do for even one patient is immense.

It is not an unreasonable estimate to say that for every appointment, a doctor spends an additional hour or more outside of that appointment on paperwork and other matters related to it.

-Drachasor