Quote:
Originally Posted by Randy4Candy
CaptainMidnight isn't exactly a molotov cocktail tossing liberal anarchist...
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LOL!
No, not exactly! Just a somewhat right-of-center political independent disgusted with the platitudes and demagoguery served up by
both of our dysfunctional parties.
Joe, the link you posted (titled
Supply-Side Tax Cuts and the Truth about the Reagan Economic Record) was co-authored by Stephen Moore, who has written a lot of demagogic nonsense over the years. He seems to think that cuts in the top marginal tax rate are a good idea always and everywhere, no matter the status of current tax policy, spending levels, or anything else. In fact, in recent years he has
still been urging cuts in the top marginal tax rate, despite the fact that they're already low by historic standards and we're running massive structural deficits.
Also remember that the vast bulk of the tax cuts of the early '80s went to the non-wealthy. Therefore, they can hardly be considered "supply-side" according to the usual interpretation of the term, inasmuch as tax policy changes did not put much in the way of additional resources into the hands of investors and "job creators." It's true that the top marginal rate was reduced from 70% to 50% in the early 1980s, but here's the dirty little secret: Virtually no one paid the 70% rate, since the code at the time was full of loopholes. Most wealthy taxpayers paid just a fraction of the statutory rate, and it really didn't matter all that much that the rate was dropped to 50%.
The 1980s recovery was a powerful cyclical recovery from a deep recession brought about by the Fed's need to tighten monetary policy and break the back of inflation by temporarily driving interest rates to stratospheric levels. By 1983, inflation had been crushed and interest rates came down sharply, propelling a strong expansion, which was further boosted by across-the-board tax cuts that put more money into consumers' pockets. Note that they can be characterized as "demand-side" tax cuts, since they primarily benefited households with substantial marginal propensity to consume.
The notion that the Reagan-era tax cuts primarily benefited the wealthy is simply a myth. That's why a reasoned look at the history of the era shows that they could not possibly have had much of a "supply-side" effect, as is still believed by many of those who read stuff written by people like Stephen Moore.
You might also note that the recovery was strongly boosted by rapidly falling oil prices, which was a direct result of better monetary policy under Paul Volcker and a strong-dollar Treasury department. Lower gasoline prices and disinflation in agricultural commodities markets acted like additional tax cuts for households of modest means.
All of that was beneficial, but it has little to do with what people think about when they hear the term "supply-side economics."
Quote:
Originally Posted by john_deere
perhaps...just maybe, we're entering an economic phase of history that's unexplainable by either keynes or freidman. maybe the dogmatists on both sides are taking us down the road to hell by their complete refusal to admit they don't have a fucking clue. possibly, the economy is just a bit more complex than we really know how to handle.
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I've long believed that you can think of the economy as a sort of evolving organism. At different times, disparate policy prescriptions may be surprisingly beneficial or harmful. Millions of individual actors make up a large nation's economy, and they certainly can move in unpredictable ways. Crowd psychology also plays an important role. Economists over the decades have found to their chagrin that it's practically impossible to mathematically model all this stuff. Sometimes it seems about as useful as trying to develop a sophisticated model to determine how successful a new movie is going to be at the box office!
By the way, John Deere, I really like your little "Gator" vehicles. They're fun toys!
For those who are not familiar:
https://www.deere.com/wps/dcom/en_US..._vehicles.page
