Clinton's Hostile Preschool Takeover

[GaryC 7]

Before you go "OH MY GOD!! THE HERITAGE FOUNDATION!!!!" Here is another source for you to bash.

Argue that you know more than a Nobel Prize winner in economics. Please try!!

Bush tax cuts

Best way to promote economic growth

October 18, 2004

The 2004 Nobel Prize in economics was jointly awarded to Edward Prescott and Finn Kydland for their influential research on the factors contributing to economic booms and busts. Prescott, an Arizona State University professor and a senior adviser at the Federal Reserve Bank of Minneapolis, remains engaged in economic analysis, as Ellen McGrattan, senior analyst with the Minneapolis Fed attested in a statement.

"In recent work," she related, "Ed asks, 'Why are Americans working much more than Europeans?' His answer is lower taxes" in the United States, where the economy is growing roughly three times faster than in Europe, and where the jobless rate is half what it is in Europe.

Against this backdrop, President Bush and John Kerry continue to square off on the economic wisdom of Bush's series of tax cuts. That includes recent legislation extending a host of tax cuts aimed at middle-class and lower-income taxpayers. It also includes a measure, which the Senate approved last week, providing $136 billion in tax cuts for corporations and businesses.

The president maintains that the nearly $2 trillion worth of tax cuts (over 10 years) he has championed have had a salutary effect on the economy, which was stumbling toward recession when he took office and suffered a blow following the terror attacks of Sept. 11, 2001.

Since the end of 2001, the gross domestic product has grown at an average quarterly rate of 3.4 percent, which is consistent with the economy's post-World War II average annual growth. Over the past four quarters, since the Bush tax cuts fully took effect, GDP has grown at a robust average of 4.8 percent clip.

Meanwhile, 1.9 million new jobs have been created over the past 13 months, including 96,000 jobs added to the economy in September. The jobless rate last month was 5.4 percent, well below the average of the 1970s, 1980s and 1990s.

Kerry insists the Bush tax cuts were fiscally irresponsible, coming during a time when America was at war. He maintains that the president's tax reductions shortchange middle-class taxpayers. And he suggests that the lower taxes have had only a negligible effect on economic growth.

Prescott, the Nobel Prize-winning economist, doesn't see it that way. If he has any criticism of the Bush tax cuts, it's that they should have been even more substantial. "What Bush has done has not been very big," Prescott said this week. "It's pretty small. Tax rates were not cut enough."

That may sound like voodoo economics to candidate Kerry, but Prescott makes a persuasive case. "In the early '90s," he explained, "the economy was depressed by the tax increase in 1993 by about 4 percent, and it's right at that level now."

So the Bush tax cuts of the 2000s have only gotten the American taxpayers back to where they were in the early 1990s, before Bush's predecessor hit them with one of the biggest tax hikes in history. The president's tax cuts have helped the economy recover from recession and overcome the shock of the terror attacks. But to promote the kind of economic expansion the nation enjoyed from the mid-1980s to the early 1990s, the next president will need to get behind another round of tax cuts.

http://www.signonsandiego.com/uniontrib/20...mz1ed18top.html

Edited July 24, 2007 by GaryC

[Trumplestiltskin 5,791]

Gary - other than that you agree with what they are saying, there's no mention anywhere of the methodology they are using to justify what they are saying. That makes it if not suspect - then it certainly requires taking on trust a lot more than the average sceptic is likely willing to, or in a way that provides well-back up points for a constructive debate.

And as for bashing the source well...

Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The obvious question I would ask - is given the above what specifically makes you think these are 'real' or 'authoritative' economists? Or indeed - that they viewing this topic from a purely economic as opposed to a political perspective?

Edited July 24, 2007 by Number 6

[Dan J 277]

The Heritage Foundation quite clearly states its bias. They are very unlikely to publish anything that doesn't support their bias no matter how true it is. So like any think tank that has an agenda, take it with a grain of salt, liberal, conservative or otherwise.

At least they disclose their bias, unlike some other organizations.

[GaryC 7]

Gary - other than that you agree with what they are saying, there's no mention anywhere of the methodology they are using to justify what they are saying. That makes it if not suspect - then it certainly requires taking on trust a lot more than the average sceptic is likely willing to, or in a way that provides well-back up points for a constructive debate.

And as for bashing the source well...

Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The obvious question I would ask - is given the above what specifically makes you think these are 'real' or 'authoritative' economists? Or indeed - that they viewing this topic from a purely economic as opposed to a political perspective?

The Heritage Foundation quite clearly states its bias. They are very unlikely to publish anything that doesn't support their bias no matter how true it is. So like any think tank that has an agenda, take it with a grain of salt, liberal, conservative or otherwise.

At least they disclose their bias, unlike some other organizations.

I direct you both to the second post. If they are smart enough to win the Nobel Prize in economics I would say that they are in a better position than any of us here to judge what is the truth about the tax cuts.

[Ban Hammer 13,334]

Very true - I make a tad more than $10K a year -

a guy as smart as you making that little?

[Trumplestiltskin 5,791]

Very true - I make a tad more than $10K a year -

a guy as smart as you making that little?

I was being sarcastic.

[Trumplestiltskin 5,791]

Gary - other than that you agree with what they are saying, there's no mention anywhere of the methodology they are using to justify what they are saying. That makes it if not suspect - then it certainly requires taking on trust a lot more than the average sceptic is likely willing to, or in a way that provides well-back up points for a constructive debate.

And as for bashing the source well...

Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The obvious question I would ask - is given the above what specifically makes you think these are 'real' or 'authoritative' economists? Or indeed - that they viewing this topic from a purely economic as opposed to a political perspective?

The Heritage Foundation quite clearly states its bias. They are very unlikely to publish anything that doesn't support their bias no matter how true it is. So like any think tank that has an agenda, take it with a grain of salt, liberal, conservative or otherwise.

At least they disclose their bias, unlike some other organizations.

I direct you both to the second post. If they are smart enough to win the Nobel Prize in economics I would say that they are in a better position than any of us here to judge what is the truth about the tax cuts.

Discussing economics on here is a bit like discussing global warming - in that unless you have any direct experience with the theory (or rather the variety of theories) and the evidence its easy to find a point of view that supports your own (political views), but which doesn't necessarily represent the current state of thinking in the field. Edward Prescott for example is a proponent of Supply Side Economics, and although I wouldn't presume to question his experience or competence at what he does - Supply-side economics is a rather controversial theory.

There's some criticism of it here.

Edited July 24, 2007 by Number 6

[GaryC 7]

Gary - other than that you agree with what they are saying, there's no mention anywhere of the methodology they are using to justify what they are saying. That makes it if not suspect - then it certainly requires taking on trust a lot more than the average sceptic is likely willing to, or in a way that provides well-back up points for a constructive debate.

And as for bashing the source well...

Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The obvious question I would ask - is given the above what specifically makes you think these are 'real' or 'authoritative' economists? Or indeed - that they viewing this topic from a purely economic as opposed to a political perspective?

The Heritage Foundation quite clearly states its bias. They are very unlikely to publish anything that doesn't support their bias no matter how true it is. So like any think tank that has an agenda, take it with a grain of salt, liberal, conservative or otherwise.

At least they disclose their bias, unlike some other organizations.

I direct you both to the second post. If they are smart enough to win the Nobel Prize in economics I would say that they are in a better position than any of us here to judge what is the truth about the tax cuts.

Discussing economics is a bit like discussing global warming - in that unless you have any direct experience with the theory and the evidence its easy to find a point of view that supports your own (political views), but which doesn't necessarily represent the current state of thinking in the field. Edward Prescott for example is a proponent of Supply Side Economics, and although I wouldn't presume to question his experience or competence remains a controversial theory.

The results speak for themselves. Whenever we cut taxes the economy improves, when we increase them the economy goes down. I am not an economist but the imperical evidence seems to prove that out.

[Trumplestiltskin 5,791]

Gary - other than that you agree with what they are saying, there's no mention anywhere of the methodology they are using to justify what they are saying. That makes it if not suspect - then it certainly requires taking on trust a lot more than the average sceptic is likely willing to, or in a way that provides well-back up points for a constructive debate.

And as for bashing the source well...

Founded in 1973, The Heritage Foundation is a research and educational institute - a think tank - whose mission is to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.

The obvious question I would ask - is given the above what specifically makes you think these are 'real' or 'authoritative' economists? Or indeed - that they viewing this topic from a purely economic as opposed to a political perspective?

The Heritage Foundation quite clearly states its bias. They are very unlikely to publish anything that doesn't support their bias no matter how true it is. So like any think tank that has an agenda, take it with a grain of salt, liberal, conservative or otherwise.

At least they disclose their bias, unlike some other organizations.

I direct you both to the second post. If they are smart enough to win the Nobel Prize in economics I would say that they are in a better position than any of us here to judge what is the truth about the tax cuts.

Discussing economics is a bit like discussing global warming - in that unless you have any direct experience with the theory and the evidence its easy to find a point of view that supports your own (political views), but which doesn't necessarily represent the current state of thinking in the field. Edward Prescott for example is a proponent of Supply Side Economics, and although I wouldn't presume to question his experience or competence remains a controversial theory.

The results speak for themselves. Whenever we cut taxes the economy improves, when we increase them the economy goes down. I am not an economist but the imperical evidence seems to prove that out.

There's a contrasting view here.

Here's some more criticism of Supply-side economics from wikipedia.

Stronger critiques of supply-side economics dismiss the entire project as a complete failure which is a trojan horse for reducing marginal tax rates on upper income brackets. These critiques are found in Samuel Bowles' work, which argues that real productivity fell under supply-side taxation regimes on a unit-worker basis. Paul Krugman of Princeton called supply-side economics "Peddling Prosperity" and dismissed it as being unworthy of serious economists in a 1994 book written for the general audience.[7] Since Krugman's early work was in international currency areas, the very theory for which Mundell received his Nobel Prize, his criticism was drawn in specifically sharp terms.

These criticisms point to the explosion in deficits and the conversion of price volatility to currency volatility as proofs that supply-side economics does not work. Supply-side defenders counter that the theory was never designed to consider government spending, and therefore cannot be blamed for this outcome. They also counter that tax revenues and the economy grew under supply-side policy, as predicted and that the Laffer Curve worked as advertised.[8] However, they usually base this on either total tax revenue or by not taking inflation into account. Income tax revenues in constant dollars fell from 1981 until 1985 [15] after the income tax cuts. Revenues from FICA taxes increased by $100 billion from 1981 to 1989, while tax rates went from 6.65% on a maximum of $29,700 in 1981 to 7.51% on a maximum of $48,000 in 1989. For the self-employed the rate went from 9.3% to 15.02% in the same period. [16]

In 2003, the Wall Street Journal declared the debate over supply-side economics to have ended "with a whimper" after extensive modelling performed by the Congressional Budget Office failed to support supply-side policies. [17] It was also suggested that Dan Crippen may have lost his chance at reappointment as head of the CBO for failing to support supply-side inspired dynamic scoring.

In 2006, the CBO released a study titled "A Dynamic Analysis of Permanent Extension of the President's Tax Relief."[18]. This study found that under the best possible scenario, making tax cuts permanent would increase the economy "over the long run" by 0.7%. Since the "long run" is not defined, some commentators[19] have suggested that 20 years should be used, making the annual best case GDP growth equal to 0.04%. When compared with the cost of the tax cuts, the best case growth scenario is still not sufficient to pay for the tax cuts. Previous official CBO estimates had identified the tax custs as costing the equivalent of 1.4% of the GDP in revenue. If the best case growth scenario is applied, the tax cuts would still cost the equivalent of 1.27% of the GDP.[20]

Edited July 24, 2007 by Number 6

[Trumplestiltskin 5,791]

Here's a link to the the CBO report referenced above.

[GaryC 7]

All I know is my own personal experience. I have better jobs and better pay after tax cuts and I tend to have worse job security and cutbacks when they raise taxes. I will still go with the Nobel winners opinion. It seems to be better when taxes are lower.

[Trumplestiltskin 5,791]

But you surely admit that there must be more to the running of the economy than the tax rate. Government spending for instance.

[Caladan 19]

Haven't read the thread but the title keeps cracking me up. I imagine soft-focus, music, maybe a television host with a mic, a zoom in on the trembling child....

"And then what happened...?"

"The lady forced me... to go to preschool."

[Trumplestiltskin 5,791]

It sounds like one of those cold-war era East European cartoons.

[w¡n9Nµ7 §£@¥€r 123]

Economics is very complicated. It really can't be dumbed down like that. The number of variables in almost any real-life scenario you can think of is more than 1.