----- Original Message ----- From: "JDG" <[EMAIL PROTECTED]> To: "Killer Bs Discussion" <[email protected]> Sent: Saturday, January 22, 2005 9:16 PM Subject: Budget Deficits and Supply-Siders Re: Kotlikoff's PSS plan
> Dan, > > My point is that "trickle-down economics" is a pejorative propoganda term. > Not a term for serious discussion. Or at least, not if you want me to > take you seriously. First, you weren't my audience...I was responding to Erik. Second, if the use of pejoritive descriptive terms is a sign of a non-serious discussion when I use them, why aren't they when you use them? For example, calling Social Security a pyramid scheme fits that very well. > You state the supply-side economics is touted as a means of reducing the > nominal federal budget deficit, namely by boosting economic growth, which > should boost federal revenues. In the long term. Bush argued again and again that cutting taxes would "get America going." That they would foster long term ecconomic growth. Are you seriously arguing that Republicans have not stated that cutting taxes on the wealthy benefits everyone because that's how the ecconomy is pushed forward? > I find this definition of yours difficult > to believe, however, as President George W. Bush has always expliticly > stated that his tax cut plan would decrease revenues. Short term, yes. But, he has stated over and over that cutting taxes over the long term will increase prosperity over the long term. "Put the money in the hands of the American people who better know how to use it." > During his election campaign he proposed his tax cuts as a means of reducing the > nominal federal budget surplus And Clinton wanted to save Social Security with the surplus... , and afterwards he was very explicit about > his intent to run a nominal federal budget deficit in a time of the > so-called "trifecta" of "recession, war, and national emergency." But, the recession is over and, if you include borrowing from the Social Security trust fund in the deficit, he's running a 600 billion/year deficit over 3 years after the recession ended. And, he wants to keep the tax cuts permanant....but doesn't include them in his long term budget figures. > While fiscal policy as a means of smoothing economic cycles is certainly > currently in disfavor among economists, I think that it is entirely > possible that the very, very, mild recession experienced by America in the > wake of the popping of the stock market asset bubble may cause some > rethinking of this. Bush's plan is/was to permanantly lower taxes in a manner the benefits the top 10% households, measured by family income, disporportionately. He masks this by talking about only part of the total taxes paid by people and also talking about only part of his tax cut when he makes comparisions. His tax cut can only be justified if supplied side ecconomics works. > Lastly, you wrote: > >In general, if Republicans want to change tax structures, they think that a > >less progressive structure is better. Democrats think a more progressive > >structure is better. > In part, that is because a more-progressive tax structure means higher tax > rates, and presumably boosts the size of government. Indeed, this can be > seen in the way that under Clinton, the government began taking around > 21-22% of GDP in tax revnenues, whereas Bush's tax plan (his first tax cut > was progressivity-neutral BTW), Are you sure. Did you include all of the tax cuts and all of the taxes. Did you include payroll taxes in your calculation, for example. > has reduced the government's take of GDP > to 17%. No. It merely has changed the source of the take. In 2000, total government spending was 18.4% of GDP. In 2003, it was 19.9%. Using T-bills to finance the government doesn't reduce the take. >Thus, it is not just progressivity, it is the size of the > government's share in the economy that is also debated. Should the size be measured in terms of spending and future oblications? Would government have zero size if there was a total tax holiday next year and the government was totally financed by debt? Dan M. _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
