Monte wrote:
So, first, let me say this - the numbers you posted from the CBO are misleading. The government refused to add the cost of the wars in Iraq and Afghanistan to those numbers during Bush's term. So, the deficit did not in fact diminish as you illustrated, and furthermore you left out 2008 and 2009 for some reason.
I didn't leave 2008 and 2009 out. They are not part of the data set pertinent to claims you have made, nor are they sufficiently finalized to make their way into a CBO deficit projection of that nature at the moment. Consequently, you would have noticed that period covered in said report ends at 2007. And 2007 is an appropriate ending point for that particular component of the conversation: we were discussing the immediate economic impacts of Bush's 2003 Tax Cuts. That said, you will need to substantiate your claim that the data fails to account for the military operations in Iraq and Afghanistan. The CBO, despite being a government agency, is not prone to such careless or egregious omissions.
Monte wrote:
As you pointed out (and no, I'm not interested in going over your post line by line. It's very very long, very informative - but I don't agree with all of your assertions) during the Reagan years, we ballooned our deficit.
First, you're skipping a presidency that's integral to the discussion. Whether you want to admit it or not, those four years happened and the tax increases you're directing toward Clinton were put in place by George H.W. Bush. Second, there are no assertions in my post. The responses are made using linked information and data provided for you. If you disagree with any of the observations or conclusions, you will need to provide sourced criticism and responses. Correlation fallacies and repeated bare assertions are not sufficient to defend your case.
Monte wrote:
During the Clinton years we raised taxes and found ourselves with a budget surplus and on the road to paying down the national debt.
Again, if you look at the CBO data provided, any reduction in the National Debt occurs during the last 3 years of Clinton's administration; this happens to coincide with the beginning of various economic difficulties resulting from hyper-inflated markets and artificial industries that caused the 1999 Recession. Now, you can make the argument that Clinton made progress against the National Debt, but so did George W. Bush prior to the 9/11 attacks in 2001. In fact, there is no substantive debt accumulation until 2002. Consequently, your next claim is certainly questionable:
Monte wrote:
GW Bush took office and cut taxes, and we went from having a surplus to a deficit, and a greater deficit than we have ever seen before. A third of that was due to tax cuts he made. The CBO projected a 1.8 trillion dollar addition to the national debt if we extended the tax cuts, and that number presumes that nothing else changes. Which means it could be much worse.
1. Either the CBO is a credible source or it is not. You cannot have it both ways. You have indicated you believe the data to be misleading, but without providing a source make the claim that the CBO projected all sorts of misery not substantiated by the data provider.
2. What is the source for claiming that a third of the increase in the National Debt was caused by tax cuts? How do you reconcile this claim with Hauser's Law? How do you reconcile rising real revenues on a year to year basis despite disputing that reality? How do you handle the fact that payroll tax increases and Federal revenues adhered to Hauser's Law?
Monte wrote:
You can't have guns, butter, and tax cuts unless you want to see a massive increase in the national debt.
Except, the situation you're describing seems disturbingly similar to Demand-Side Economics. Short-term government spending targeted at increasing labor demand, which a wartime economy must necessarily do, should produce dividends according to the arguments you are making. Yet, despite doing everything you contend is positive, you continue to claim that the George W. Bush Administration is an economic disaster. Why is it that you can suddenly have it both ways? The data neither supports your claims nor your arguments, but you have yet to provide counter sources of any meaningful measure.
Monte wrote:
You think macro economics is fatally flawed. I get that, but I strongly disagree. Supply side economics is macro policy, but it's wrong, in my estimation. History is pretty clear on that. It was a conservative (and I don't dispute that it was macro-economics) experiment that was deeply flawed.
I don't think you've read my post. You don't seem to understand that Supply-Side and Demand-Side Economics are both inextricable parts of the same system. More to the point, you fail to grasp that government level policy, that is intervention, intrusion, regulation, deregulation, etc., need not and may not conform to actual economic law or theory. Rather, you have continued to make the same assertions without substantiating your claims. How do you respond to the Wanniski observation that "Trickle-Down Economics is Conservative Keynesianism"? Did you miss that statement? Because, from what I am reading in your last post, you are still conflating two different positions of political economy. Indeed, your posts are not in the realm of economics. Your posts are political economy without substance.
Monte wrote:
I also don't dispute that trickle down economics is a form of macro economics. It, however, was also flawed. A rising tide did not lift all boats. It lifted the biggest boats, and swallowed the smallest.
Except, I said nothing of the sort nor made any defense of Trickle Down Economics. I did, however, point out a flawed conflation of terms for political purposes. Do you understand the differences between Trickle Down Economics and Supply-Side Economics?
Monte wrote:
Don't make the mistake of thinking that I see Keynesian theory as being perfect. I don't. I think it fails to answer a number of questions, most specifically the problem of distribution. However, I think it's more correct than any other brand of economic thought.
I think, now, you are simply trying to equivocate. We have several references, including a few in this very thread, where your adamantly defend Demand-Side Economics as "right":
Monte wrote:
There is no doubt that their position was spot-on.
Monte wrote:
When spending goes down, the government steps in and spends in order to bring it out of a recession. When average prices begin to rise the government can then cut spending and raise taxes in order to pull heat out of the inflationary period. The goal is to minimize the damage and suffering and to keep us as close to full employment GDP as possible. The business cycle is there, it isn't going away, and starving a starving person isn't going to help him at all.
Monte wrote:
And he is absolutely correct.
The reason we are in the situation we are in now is because people foolishly believe that running a country is like running a household. Had we followed his advice, and had we had the courage to spend a lot more money now to create jobs (yes, even if we had to pass the largest public works program since WWII), we would be well on our way to fiscal health.
Our problem right now, as Kaynes said a long time ago, was a persistent lack of demand. When the private market goes into such a cycle, it is unlikely to come out of it any time in the near future. So, government steps in and fills the gap. The key is for the government to stave off rising prices when the economy overheats.
Monte wrote:
It's basic economics. I know it's not the kind of economics that are generally accepted as legitimate on this board, but it is the sort of economics that are generally accepted as legitimate pretty much everywhere in the world. It's macroeconomics, it's demand-side, and it's correct.
Yes, Khross is going to disagree with that assessment vehemently, but he's wrong.
So, which is it? Is Keynes "right", "absolutely correct", or "incapable of answering some questions"? Can you be more consistent in your assessment. More to the point, since nothing in my post is anything more than explication of the facts as you choose them; that is, as contained within Wikipedia, why is it you're suddenly chafing at the discussion?
Monte wrote:
I don't know what you refer to when you refer to the Debt Accumulation problem, but I would prefer not to guess. I assume it has something to do with the issues that large, growing debt can have on a macro economy. And I certainly don't dispute that.
Alright, we'll discuss the Debt Accumulation Problem in a bit, provided you actually address the post I made instead of the post you think I made. That said, why do you think macro-economies are somehow discreet entities from the micro-economies that comprise them?
Monte wrote:
I believe that there's a time to pay down the debt, and that time is *not* when the economy is hurting so badly. You must spend in order to get the economy back on it's feet. You can pay down the deficit when the business cycle overheats via tax increases and spending cuts that help to cool the economy off.
Business Cycles don't overheat. In fact, I was kind of waiting for you to use the term Business Cycle. Are you familiar with
Real Business Cycle Theory? It's certainly mainstream enough that it's included in the general body of thought producing current Keynesian policy recommendations. That said, what causes peaks, booms, troughs, slopes, recessions, etc? Why do these things happen? What's the functional value of inflation as a measure of growth in such a system? More to the point, if the frequency between recessions decreased but debt continues to accumulate without any attempts to pay it down, how does that affect future growth and cycle times?
Montegue wrote:
Keynes' argument, as far as I can tell, is that a balanced budget is really only useful when you are operating at optimal efficiency. The budget is a tool to correct, counter cyclically, changes in the business cycle.
And that contention is still very much under debate. The evidence indicates that government pressures has real impacts on supply and demand curves all across markets. The extent of those impacts, however, are variable, unpredictable in any measurable sense, and fail to produce the macro-economic claims and returns you want. To that end, how then are we succeeding with Demand-Side Economics now? And, again, since the Debt continues to mount against increasing deficits, when will the appropriate time to pay down the debt be?
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