Re: Taxes -- Adilbrand Noblesword's Hall of Warriors

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Date Posted: 13:43:59 03/26/04 Fri
Author: Adilbrand
Subject: Re: Taxes
In reply to: Abba's Son 's message, "Taxes" on 12:37:52 03/26/04 Fri

There were more factors involved with Reagan's economics than just tax cuts. You have to consider the business cycle and how that relates to the macroeconomy as a whole. Keep in mind that we have the lowest tax rate per capita in the free world - we can afford more taxes.

Besides, I am not sure a deficit economy is the best, which is Republican economics. According to the Misery Index (published in the Economic Report of the President, 2001), the Reagan era was not so hot, although the economics at the time were probably called for. There is a lot of truth in Say's Law, but supply-side economics will eventually falter. I don't think the trickle-down theory is allocatively efficient nor is it productively efficient.

High deficit spending raises interest rates, which, in turn, discourages investment. During the Reagan era, the Japanese were able to invest in their businesses and technologies at TWICE our rate, creating a huge domestic (for them) pool of savings and still have enough left over to invest in the USA and other countries.

According to economist Stephen L. Slavin, another negative aspect of deficit spending encouraged by the Republicans is that the federal government becomes increasingly dependant on foreign savers to finance the deficit. The deficit during Reagan's era sopped up more than half the personal savings in this country, making that much less savings available to large corporate borrowers seeking funds for new plant and equipment to keep up with the Japanese.

I don't think it is correct to slavishly devote oneself to one economic theory or another - but to utilize the one that best serves the economy at the time. Just because something worked once does not mean it will always work.

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Replies:

Re: Taxes -- Abba's Son, 15:16:57 03/26/04 Fri
- Re: Taxes -- mvd, 15:35:11 03/26/04 Fri
  - Re: Taxes -- Abba's Son, 16:35:54 03/26/04 Fri
    - Re: Taxes -- mvd, 22:07:12 03/26/04 Fri
- Re: Taxes -- Adilbrand, 16:02:36 03/26/04 Fri
  - Further Reflection on Education -- Adilbrand, 16:39:36 03/26/04 Fri
  - Only responding to your last point -- Abba's Son, 16:41:46 03/26/04 Fri
    - I agree -- Adilbrand, 17:40:31 03/26/04 Fri
  - Comments on the comments -- Mt. Healthy Mountaineer, 16:34:02 03/28/04 Sun
    - Re: Clarification on Taxation -- Adilbrand, 09:34:14 03/29/04 Mon
      - I (mostly) agree -- Mt. Healthy mountaineer, 18:29:57 03/29/04 Mon
        Re: I (mostly) agree -- mvd, 20:13:32 03/29/04 Mon
        Bolstering the economy with a tax cut? Yep. -- Adilbrand, 21:42:08 03/29/04 Mon
        In Short -- Adilbrand, 22:03:25 03/29/04 Mon
        Re: Bolstering the economy with a tax cut? Yep. -- mt. healthy mountaineer, 22:04:46 03/29/04 Mon
        That all makes sense! Thanks! -- Adilbrand, 22:17:36 03/29/04 Mon
        Re: I (mostly) agree -- Adilbrand, 20:47:22 03/29/04 Mon
        Re: I (mostly) agree -- mvd, 20:55:15 03/29/04 Mon
        Inflation -- Adilbrand, 21:19:41 03/29/04 Mon
        Re: Inflation -- mvd, 21:29:55 03/29/04 Mon