My econ professor, who seemed to be no fan of the democratic party, when teaching the Laffer Curve made a point of saying all the current taxation hoopla was absurd. Saying something like looking at taxation in terms of Govt spending/GDP that in the past 100 years it has varied as much 45% and that for all the Bush tax cuts for the wealthy and all the taxation for those making over a certain amount that dems were looking for that you were only talking 4 to 8% differences. Which he called "fussing around the edges" and he considered both parties basically identical in fundamental taxation policies despite their attempts to look different on the issue. He also made point of saying that any gov that stays at or below 55% (which he said is somewhere near the zenith of the laffer curve) would do alright, and that only some Scandinavian countries were really pushing that edge.



I'm not sure how much of it I buy, but it was an interesting point nonetheless.

2/12/2010 6:17:58 PM

It is an odd cultural trait of various societies. For some reason, although tax rates today are half what they were only thirty years ago, we collect roughly the same percentage of GDP in revenue.

2/13/2010 12:11:15 PM

Good thing those dollars collected by .gov buys the same amount of stuff.

2/13/2010 12:32:23 PM

http://tpmdc.talkingpointsmemo.com/2010/02/virginia-gov-bob-mcdonnell-then-stimulus-bad-now-thanks-for-the-cash.php?ref=mp

Quote :

"Virginia Gov. Bob McDonnell Then: Stimulus Bad. Now: Thanks For The Cash! Virginia Gov. Bob McDonnell is now offering effusive praise for $24 million in federal funds that allowed him to establish an office of Health Information Technology and to fund a program helping Virginia doctors transition to electronic medical records. Just one problem - he thinks the government shouldn't have spent that money to begin with. One year ago, McDonnell told reporters the stimulus plan "is not going to be good long-term for America," though he did say according to the Virginian-Pilot that the Commonwealth should still "collect its share of the stimulus anyway." Last summer, the Roanoke Times reported that McDonnell said the stimulus created more problems than it solved. Yesterday, McDonnell (R) lauded Health and Human Services Secretary Kathleen Sebelius for "advancing such a critical issue." "The federal funding awarded to Virginia will allow us to develop an information technology system that will safeguard our ability to track health records and provide our physicians with the technological tools they need to provide the highest quality service possible," he said of the grants, both of which were funded through the recovery act. McDonnell's office tells me this morning the funds were requested by the last administration and sends along this post noting he'd take the stimulus funds. But the have it both ways mentality is a point the Democrats are going to continue to press through the midterm Congressional elections. As we've reported exclusively, Democratic operatives have a thick book of examples where Republicans who voted against or publicly balked at the stimulus plan championed the funds. They plan to pull it out as often as possible, starting this week since it's the one-year anniversary of Obama signing the $787 billion measure. And McDonnell's latest was added to the bunch. DNC Chairman Tim Kaine (McDonnell's predecessor in Virginia) is hosting a conference call today to highlight the hypocrisy. "It's typical of Republicans to call 'critical' locally what they attack as a 'waste' nationally," said DNC spokesman Hari Sevugan, calling it a pattern of "gross hypocrisy which has irrevocably tainted Republican credibility on the stimulus and spending." Gov. Tim Pawlenty (R-MN) also has been targeted. The DNC reminded reporters that Pawlenty told Bloomberg Television in August the funds in the stimulus were "largely wasted" and "misdirected." But the Star Tribune reported today that one third of Pawlenty's fix to his state's budget relies on $387 million in stimulus funds. "

2/16/2010 3:43:34 PM

^ So I guess the democrats now conceed that the stimulus was and always will be bad? Or are only people that always liked it allowed to like it now?

The stimulus was barely passed in a majority democrat Congress, I wouldn't go around proclaiming that I always liked the stimulus.

2/16/2010 4:28:30 PM

^The GOPs aren't being called out for changing their mind after seeing it work, they're being called out for voting against while calling it necessary, for trashing it publicly & sending the Obama Administration pleading for specific projects in their home-states.

http://www.nytimes.com/2010/02/17/business/economy/17leonhardt.html?hp

Quote :

"Imagine if, one year ago, Congress had passed a stimulus bill that really worked. Let’s say this bill had started spending money within a matter of weeks and had rapidly helped the economy. Let’s also imagine it was large enough to have had a huge impact on jobs — employing something like two million people who would otherwise be unemployed right now. If that had happened, what would the economy look like today? Well, it would look almost exactly as it does now. Because those nice descriptions of the stimulus that I just gave aren’t hypothetical. They are descriptions of the actual bill. Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative."

^I don't think anyone is conceding that.

Quote :

"The program has had its flaws. But the attention they have received is wildly disproportionate to their importance. To hark back to another big government program, it’s almost as if the lasting image of the lunar space program was Apollo 6, an unmanned 1968 mission that had engine problems, and not Apollo 11, the moon landing. The reasons for the stimulus’s middling popularity aren’t a mystery. The unemployment rate remains near 10 percent, and many families are struggling. Saying that things could have been even worse doesn’t exactly inspire. Liberals don’t like the stimulus because they wish it were bigger. Republicans don’t like it because it’s a Democratic program. The Obama administration hurt the bill’s popularity by making too rosy an economic forecast upon taking office. Moreover, the introduction of the most visible parts of the program — spending on roads, buildings and the like — has been a bit sluggish. Aid to states, unemployment benefits and some tax provisions have been more successful and account for far more of the bill. But their successes are not obvious. Even if the conventional wisdom is understandable, however, it has consequences. Because the economy is still a long way from being healthy, members of Congress are now debating another, smaller stimulus bill. (They’re calling it a “jobs bill,” seeing stimulus as a dirty word.) The logical thing to do would be to examine what worked and what didn’t in last year’s bill."

2/16/2010 10:44:51 PM

Yes some repubs are being hypocritical. But that's not going to be a big enough issue to avoid the blood-bath that democrats have brought upon themselves this fall.

2/16/2010 11:16:58 PM

bloodbath... lol

http://www.fivethirtyeight.com/2010/02/republicans-must-defend-senate-seats.html

2/16/2010 11:29:55 PM

Quote :

"after seeing it work"

Really?

Im not sure I see the point you think you have. They opposed the increase of spending, now that it has passed they are using their share. right?

2/17/2010 9:58:33 AM

Quote :

"bloodbath... lol "

Quote :

" In five decades of closely following American politics, I have never seen the Democratic Party in worse shape. Democrats trail in polls in 11 of the 18 Democratic-held Senate seats up this fall and lead in polls in none of the 18 Republican-held seats. "

2/17/2010 5:01:34 PM

Here is a list of over a hundred top republicans who opposed the recovery bill and then took credit for it, in may cases writing letters to the administration secretly pleading for the money, while publicly saying they oppose the very idea of it.

http://thinkprogress.org/touting-recovery-opposed/

2/17/2010 5:49:22 PM

Quote :

"in may cases writing letters to the administration secretly pleading for the money, while publicly saying they oppose the very idea of it."

Seems reasonable to me. I oppose the very idea of the stimulus too, but since it is being spent anyway, at least they can spend it rationally (IE, in my district).

2/18/2010 11:45:14 AM

"Seems reasonable to me"

All I am saying is they were pretty quick to play this up as a socialist agenda to destroy America while simultaneously reminding the administration that it was necessary that this pass, and that they get as much pork as possible, and then take full credit for something they voted against with big fake checks.

If that sounds reasonable to you, then by all means vote incumbent Burr into office again, who is on that list of GOP hypocrites that you just described as reasonable, so he can vote against anti-rape amendments, tell his family to do a bank-run whenever the economy turns sour, who who stood against Tammy Duckworth's attempts to help veterans, who is anti-choice, who thinks domestic abuse ought to be a pre-existing condition, and who thinks the US constitution needs to be amended to ban gay marriage.

2/18/2010 1:27:35 PM

Quote :

"In five decades of closely following American politics, I have never seen the Democratic either Party in worse shape."

Quote :

"they get as much pork as possible"

Inflation is a tax on those who receive printed money last. Were I a congressman, I would have voted against the stimulus but if the money is going to be spent regardless, I see no reason not to at least return to my district approximately the amount of money they are on the hook for.

2/18/2010 2:56:11 PM

You should note that the inflation rate for last year was negative.

2/18/2010 5:48:04 PM

market will take due to the feds raising the borrowing rate by .25, nice little run that will be screwed come Friday...expect triple digit point loss.

2/18/2010 5:57:36 PM

I thought the 2009 stimulus bill was supposed to be a Jobs Bill. was I mistaken?

2/20/2010 4:42:01 PM

I pointed out earlier, creating jobs was not the purpose of the original stimulus, it is a byproduct, but not the whole purpose. The purpose of the stimulus was to get money moving.

2/20/2010 4:53:17 PM

and boy did it ever get money moving... to democratic districts

2/20/2010 4:56:42 PM

Who have been net creditors to red states for who knows how long. Seems fair to me.

2/20/2010 5:02:46 PM

what a fucking child you are. I suppose two wrongs now make a right, then

2/20/2010 5:04:10 PM

Who said anything about "wrongs"?

[Edited on February 20, 2010 at 5:06 PM. Reason : and you seem to be on your man period again]

2/20/2010 5:06:18 PM

well, it certainly can't be assumed that I was saying it was "right" to use a "stimulus bill" to funnel money to democratic districts. admit it, dude, you're a partisan hack. hell, you are PartisanHack

2/20/2010 5:19:57 PM

No one said anything about right and wrong.

For some period of time blue states have been sending out more in Federal dollars than they receive, red states the opposite.

Knowing this, we'd expect blue states to be having more budget troubles right now. So it's at least a reasonable expectation that they get more federal dollar support during times like these.

Do you have a legit argument or just more typical aaronignorant grand standing?

2/20/2010 5:27:50 PM

so, you are just going to ignore what I said and say the same thing again. at least you expanded on it.

btw, we would expect blue states to be having budget issues NOT because of them paying more than they receive. Rather, we expect it because they espouse the very social programs that are causing the national budget to be hemorrhaging money. California is a PRIME example of this. so is Massachusetts, which is, not surprisingly, losing a shit ton of money on the very health-care plan Obama wants the whole nation to have, all the while swearing up and down that it will "reduce the deficit".

But, at least you are man enough to admit that the porkulus bill was NOT about the economy. It was about rewarding those who are in power with political favours.

2/20/2010 5:30:12 PM

Quote :

"For some period of time blue states have been sending out more in Federal dollars than they receive, red states the opposite. Knowing this, we'd expect blue states to be having more budget troubles right now. So it's at least a reasonable expectation that they get more federal dollar support during times like these. "

Out of curiosity, do you support "tax cuts for the rich" in times like these?

2/20/2010 5:47:45 PM

Quote :

"and boy did it ever get money moving... to democratic districts"

You are correct, but it isn't due to partisan hackery, it's due to the fact that the financial centers that are best able to begin moving money again are coincidentally in democratic districts, that's just the way it works, urban areas lean democratic.

2/20/2010 6:03:53 PM

In general, I'd be all about cutting spending and having tax rates at a level that keeps the "rainy day" coffers filled properly.

I don't think cutting taxes in the short term is going to do much of anything until this



decides to come back to the mean.

2/20/2010 6:06:28 PM

why do plots like ^that never use a damn log scale? a straight line trend on a plot like that makes no sense

[Edited on February 20, 2010 at 6:09 PM. Reason : .]

2/20/2010 6:08:39 PM

^^^ cognitive dissonance is a bitch, isn't it.

2/20/2010 6:19:29 PM

that only took me a minute. and hey look, the trend really hasn't changed that much over the past 40 years.

2/20/2010 6:25:07 PM

So you're saying has been growing exponentially?

Is our economy growing exponentially?

2/20/2010 6:48:56 PM

yes. that's how it works.

2/20/2010 6:51:52 PM

The economy grows exponentially?

2/20/2010 7:53:43 PM

It has to, because populations grow exponentially.

if the economy grew linearly, we'd be in deep shit, because that means every generation would definitively be poorer than the previous, unless we enacted strict legal birth limits.

this is such a basic concept though, it's really sad that this is what TSB has devolved into.

2/20/2010 8:00:19 PM

dude, it's Chance, what do you expect

2/20/2010 8:03:43 PM

Huh?

The US population was around 215 million in 1970. The population in 2000 was around 280 million.

Per that chart, total bank credit in 1970 was under 1 trillion. In 2000 it was around 4.5 trillion.

In 2010 it had zoomed to 9.5 trillion.

Productivity gains are definitely a component in there some where, I suppose Lonesnark could clue us in. But there was certainly nothing rational that can account for the doubling of credit from 2000 to today.

Feel free to make the argument that credit growth since 1970 (you know, when we left Bretton Woods) has been appropriate for our economy.


Ignoring all that, even if we allow populations to grow exponentially, credit growth is growing faster than population growth, which is the take home lesson.

[Edited on February 20, 2010 at 8:08 PM. Reason : .]

2/20/2010 8:06:32 PM

Quote :

"dude, it's Chance, what do you expect"

I'd love for you to attempt an argument other than your standard

hurrrr

lazy people suck up all the resources

hurrrr

<right wing talking point>

hurrrr

<mouth breath>

huurrrrr hurrr hurrr

2/20/2010 8:27:05 PM

i'm not entirely sure I've made any of those arguments. did you take too much Rogaine this morning?

2/20/2010 8:37:38 PM

I took about as much as the compelling posts you've made in this thread.

I'm still bald

2/20/2010 8:42:43 PM

Quote :

"But there was certainly nothing rational that can account for the doubling of credit from 2000 to today."

Well inflation is part of it.

2/20/2010 10:24:58 PM

Eh?

I'd argue inflation is the result of the credit growth, not the other way around.

2/20/2010 10:29:16 PM

I was referring to the whole "economy grows exponentially". It still stands that the "real growth" is different as those graphs are not inflation adjusted.

2/20/2010 10:45:24 PM

I'd argue that inflation is the result of a massive expansion of the money supply. though an expansion of credit could do the same, I suppose

[Edited on February 20, 2010 at 11:14 PM. Reason : ]

2/20/2010 11:14:14 PM

http://www.stsci.edu/~jordan/other/economics/credit_us_economic_expansion.html

[Edited on February 20, 2010 at 11:27 PM. Reason : .]

2/20/2010 11:26:53 PM

Quote :

"massive expansion of the money supply. though an expansion of credit could do the same"

Expansion of credit is expansion of money supply.

2/21/2010 12:43:45 AM

well, it is, but it isn't, though. It's not an expansion of the hard money supply, which is why I'd have to mull it over. It could have the same ultimate effect, though

2/21/2010 12:50:53 AM

Quote :

"Expansion of credit is expansion of money supply."

Not necessarily. It's often an expansion of the money supply with a fractional reserve banking system and a central banking system, but it's conceivable that someone could lend money (that they actually have in their possession) to another person and charge them a fee ("debt"), and there would be no increase or decrease in the total money supply.

2/21/2010 1:14:40 AM

But that wouldn't be an expansion of credit.

2/21/2010 7:58:59 AM

Quote :

"conceivable that someone could lend money (that they actually have in their possession) to another person and charge them a fee ("debt"), and there would be no increase or decrease in the total money supply."

That's exactly how lending does expand the money supply. If you borrow $20 from me, then you have $20 and I have an IOU for $20, we've increased the money supply!

2/21/2010 12:42:38 PM