08-03-2003 00:11									#181
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Only worthwhile statistics:

Saddam alive: economy bad
Saddam dead: economy good

	08-03-2003 00:54									#182
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lol Ted, that's so funny!

	11-03-2003 19:12									#183
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Hey, when did Roland get elected to the St. Louis Fed Presidency??

In the case of the GSEs, the enormous scale of their liabilities could create a massive problem in the credit markets. If the market value of GSE debt were to fall sharply, because of ambiguity about the financial soundness of GSEs and about the willingness of the federal government to backstop the debt, what would happen? I do not know, and neither does anyone else.

http://stlouisfed.org/news/speeches/2003/3_10_03.html


It is a good overview, and has some good points, even though I think Poole's understanding of the mortgage business is much more limited than his propensity to give speeches about the topic.

	11-03-2003 19:15									#184
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Funny. I read this as "Let's get ready for the big GSE bailout, just in case..."

	11-03-2003 19:24									#185
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It is kinda silly to say "let's pull the GSE guarantee" because you know that if things went into the crapper, they would get bailed by the govy guarantee or no guarantee.

	11-03-2003 19:25									#186
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Yeah well, but he can't just say "let's make it official". That would be... dare I say it... honest.

	11-03-2003 21:28									#187
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Have you American guys been reading Krugman lately? I don't know how representative he is since he is my only conduit into American politics, but his critiques of the Bush administration seem ever more damning.

	11-03-2003 21:39									#188
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I don't know how representative he is

He writes for the New York Times. Generally, this means that he is in the 20-25% of the electorate that is hardest left.

If you ignored Krugman, you wouldn't have any less information about American politics, even if you agree with him.

	11-03-2003 23:06									#189
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Yeah, I was aware of that. I don't have much interest in American politics, I just read Krugman because he has my respect as an economist. What I don't know is the positions taken on the issues Krugman discusses by less left-leaning commentators.

It's not just Krugman........many prominent academics like Auerbach and Gale are speaking out.......surely other more mainstream commentators have picked up on this.

	11-03-2003 23:15									#190
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Oh, I think they have picked up on it. But it's more like a battle royale. Heavies on both sides. Of course the academics would take a position. In a way, the debate wouldn't be worth it if it weren't a pack of tough questions.

	12-03-2003 00:23									#191
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And Mankiw is a respected academic as well. Thoroughly nice bloke by all accounts, though I haven't met him personally. I hope he is still respected in 1 years time.

	12-03-2003 01:40									#192
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You mean respected by the supply siders?

http://washingtontimes.com/commenta...310-7730962.htm

	12-03-2003 02:09									#193
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Looks like the Wash Times has its head up its ass again.

	12-03-2003 02:16									#194
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Hehe hilarious article. Of course Greg Mankiw, like all actual economists, knows how stupid supply-siders are. He also knows about the long term impact of large budget deficits.

I (along with many in the economics profession) am betting that he wont last that long, because he probably thinks he will get the chance to use his expertise to help matters, whereas in reality it seems quite probable that he has been hired to add credibility to inherently incredible policies.

But we shall see.

	12-03-2003 02:30									#195
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Looks like the Wash Times has its head up its ass again.

Did it ever not?

Spike: What do you believe are the inherently incredible policies?

	12-03-2003 02:36									#196
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Tax cuts aimed at making the tax system more regressive.........sold as expansionary measures. This, of course, in the face of the demographic problems to be faced by all developed economies in the next few decades.

	12-03-2003 02:39									#197
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Are you saying "less progressive" rather than "more regressive"? Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?

	12-03-2003 02:42									#198
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I haven't heard DanS say that they aren't demand-sided yet.

	12-03-2003 02:42									#199
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Eh?

	12-03-2003 02:43									#200
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quote: Originally posted by DanS Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?

Not much. There's no demand.

	12-03-2003 02:46									#201
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quote: Originally posted by DanS Eh?

Are you still saying that the stimulus package will stimulate demand?

	12-03-2003 02:49									#202
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quote: Originally posted by DanS Are you saying "less progressive" rather than "more regressive"? Also, as a matter of economics, do you believe that removing capital taxes will encourage economic growth?

Sure, less progressive. For what its worth the recent changes in capital taxes have the support of most economists........but the effects on growth, whilst positive, are marginal at best.

The effect of sustained large budget deficits on growth would be far from marginal however.

	12-03-2003 02:59									#203
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For what its worth the recent changes in capital taxes have the support of most economists

Do you mean that most economists support Bush's proposal to eliminate dividend taxes?

but the effects on growth, whilst positive, are marginal at best

The White House claims it will increase growth by about .5 percentage points per annum. Does that sound about right?

	12-03-2003 03:03									#204
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There will be no actual growth in the long run because taxes are going to have to be increased again in the near future. They will have to be increased even more so if interest rates go up because that will increase the tax burden. In the short run the growth (if any) wont be significant.

	12-03-2003 03:20									#205
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quote: Originally posted by DanS For what its worth the recent changes in capital taxes have the support of most economists Do you mean that most economists support Bush's proposal to eliminate dividend taxes? but the effects on growth, whilst positive, are marginal at best The White House claims it will increase growth by about .5 percentage points per annum. Does that sound about right?

STOP DANS'ing me!!

Ok, economists don't like capital taxes in general, but I don't want to lead you to believe all economists are behind the abolition of taxes on dividends. You see this too is a cut that lowers the progressivity of the overall tax system since if you have stocks in a 401(k), your dividends are already tax-sheltered. Hence Bush's plan helps only people who have lots of stock outside their retirement accounts.

What is more it was sold as expansionary (which it isn't), and as the end of double taxation in this circumstance, though of course much income is taxed twice anyway. I can see why people like Krugman get worked up over these issues.

So it is a little underhand. We're talking about reducing distortions that hinder a market economy when allocating scarce resources. Now this is of course desirable, which leads to many economists supporting such changes, but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth.

	12-03-2003 04:37									#206
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quote: Originally posted by DrSpike but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth.

Maybe it is just a typo from .05%.

It is good, as you say, from allocating capitalist viewpoint, though I would make it the same as the capital gains tax.

Peter Fisher, the Under Secretary of the Treasury for Domestic Finance has been quoted as saying as much:

1) reduce corp debt reliance
2) reduce tax avoidance incentives
3) encourage investment in stable capital intensive industries

	12-03-2003 06:17									#207
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From what I've read, Snow is saying that the tax cuts will increase tax revenue. I'm sure he's counting on atleast .5% extra growth. That certainly doesn't mean it's going to happen. It's just politics.

	12-03-2003 13:04									#208
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quote: Originally posted by DrSpike Ok, economists don't like capital taxes in general...

Hmm... what do you mean? Taxes on capital, taxes on capital gains, or taxes on capital income?

"We're talking about reducing distortions that hinder a market economy when allocating scarce resources."

Hmm... will the abolition of the taxation of dividends really achieve this?

	12-03-2003 23:10									#209
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but I don't see how anyone could credibly come up with a figure of .5% per annum additional growth

I'll try to find more backup for these calculations. I believe the .5% per annum is how they derive the expected bump up in equities prices as well--i.e., discount .5% additional growth per annum with a suitable discount rate to get a 9% increase in equities prices.

On another topic, it's pretty amazing how bad the CAC40 and DAX have been doing. Here's the DAX...

Does this suggest that the S&P/FTSE are trailing CAC40/DAX and still have a ways to go on the downside? It's amazing to me that Germany and France aren't in a depression. Are these markets really that small? Or have we learned our lessons sufficiently well that a 70% plummet in equities prices doesn't create instability?

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Last edited by DanS on 12-03-2003 at 23:21

	12-03-2003 23:11									#210
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And the S&P. FTSE looks a lot like it.

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