The Smallest Minority

I had an English friend just return from the US.  His first comment to me was how surprised and shocked he was at how polarized the country had become since his last visit.

They already are treading on us.

That's Kent McManigal, I think.

The symbolism of the rattlesnake it that he warns before he strikes.  So a better slogan for this flag would be, "CAN YOU HEAR ME NOW?"

Ideally, half the country will get this message on the morning of 3 November.

Sigh.

"Inadequate" does not mean "same as the old boss."

I know you're less interested in politics per se than in the big picture, Kevin; but occasionally, the big picture is made up of a bunch of tiny pixels. Even if a crushing GOP victory only delayed the collapse by a few months, that ain't nothing.

And in this case, I suspect it will do far more than that. The Tea Party people are not interested in being co-opted by the GOP old boy network.

How do you know for certain that we are hitting an iceberg to being with, Kevin? Or Mastiff? I guess what I'm wondering is that you seem so sure of yourselves that it doesn't jibe with your other proclamations of critical thought...I don't get it.

I guess what I'd like to see are some very specific examples of what you think is going to happen. Define hitting an iceberg. In fact, define the time frame in which this is going to happen. What are specfic examples of the fall out? I'm very interested to track these examples and see if they come to fruition.

How do you know for certain that we are hitting an iceberg to being with, Kevin? ... Define hitting an iceberg.

Well, here's one aspect of the iceberg (image below) anyway. 

The iceberg is my metaphor for our government spending, and its promises to spend, beyond any reasonable expectation of our means, and our national unwillingness to face it.  As someone said, you can ignore reality.  What you can't ignore is the consequences of ignoring reality.

As to timeframe, I can't say with any precision.  Too much depends on what happens elsewhere in the world.  Let's just say that the timeframe is less than twenty years.  If nothing changes, a lot less.

Juris, specifics. What is going to happen? I've seen the results of the actions (or inactions of the GOP). I think the jury is still out on the DFL.

Kevin mentions spending and provides us with a graph. What is the source of this graph?

As to the deficit.

The Congressional Budget Office (CBO) estimates that the federal budget deficit for 2010 will exceed $1.3 trillion—$71 billion below last year's total and $27 billion lower than the amount that CBO projected in March 2010, when it issued its previous estimate. Relative to the size of the economy, this year's deficit is expected to be the second largest shortfall in the past 65 years: At 9.1 percent of gross domestic product (GDP), it is exceeded only by last year's deficit of 9.9 percent of GDP. As was the case last year, this year's deficit is attributable in large part to a combination of weak revenues and elevated spending associated with the economic downturn and the policies implemented in response to it.


As such, CBO assumes that tax reductions enacted earlier in this decade that are currently set to expire at the end of this year do so as scheduled; it also assumes that no new legislation aimed at keeping the alternative minimum tax (AMT) from affecting many more taxpayers is enacted. In addition, CBO assumes that the measures enacted in the past two years to provide fiscal stimulus to the weakened economy will expire as currently scheduled and that future annual appropriations will be kept constant in real (inflation-adjusted) terms. Under those assumptions, the federal budget deficit would decline substantially over the next two years—to 4.2 percent of GDP by 2012—and, consequently, the budget would provide much less support to the economy than has been the case for the past two years.

It goes on to predict slow growth and minimal spending. The question is....what if not hitting the iceberg means letting the tax cuts expire for those who make over 250K a year? Or all of them? Let's see now...we've cut taxes twice under Bush and once under Obama.

Did that work? Why or why not? How?

 specifics. What is going to happen?

If we could tell you that, we wouldn't be bloggers.  We'd be rich speculators like, say, George Soros or Warren Buffett.

Now:  Relative to the size of the economy, this year's deficit is expected to be the second largest shortfall in the past 65 years: At 9.1 percent of gross domestic product (GDP), it is exceeded only by last year's deficit of 9.9 percent of GDP. As was the case last year, this year's deficit is attributable in large part to a combination of weak revenues and elevated spending associated with the economic downturn and the policies implemented in response to it. 

And:

CBO assumes that tax reductions enacted earlier in this decade that are currently set to expire at the end of this year do so as scheduled; it also assumes that no new legislation aimed at keeping the alternative minimum tax (AMT) from affecting many more taxpayers is enacted. In addition, CBO assumes that the measures enacted in the past two years to provide fiscal stimulus to the weakened economy will expire as currently scheduled and that future annual appropriations will be kept constant in real (inflation-adjusted) terms. Under those assumptions, the federal budget deficit would decline substantially over the next two years—to 4.2 percent of GDP by 2012—and, consequently, the budget would provide much less support to the economy than has been the case for the past two years. 

AND THEN YOU ASK:

The question is....what if not hitting the iceberg means letting the tax cuts expire for those who make over 250K a year? Or all of them?


What part of "weak revenues" did you miss?  What on Earth makes you think that "letting the tax cuts expire" will result in a sudden massive influx of cash to the federal government, rather than a continuing weak economy and unemployment?  On what planet does a $13 trillion debt that "merely" increases by 10% in ONE YEAR not throw up warning flags?  Wow, gee!  The amount of money we're spending is only a few hundred billion more than we're bringing in!  Cause to celebrate!!

The Democrats are not responsible for this, Markadelphia, we are.  Both parties and the people who elected them.  Rainbow-farting unicorns do not, in fact, exist.

During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE.  

Show me the numbers from a nonpartisan or primary source that this is true. Because we have heard this before...

http://www.factcheck.org/taxes/supply-side_spin.html

As Kevin is fond of saying, RTWT.  I'm interested in your response that specifically refute the list of economic experts and analysts in this article. Alan Vidard directly contradicts your statement.

Here is another, more concise version.

http://www.factcheck.org/askfactcheck/have_tax_cuts_always_resulted_in_higher.html

If we could tell you that, we wouldn't be bloggers.  We'd be rich speculators like, say, George Soros or Warren Buffett. 

So then why all the certainty then? It seems to me that you've decided the Democrats or whomever have decided that it's going to fail and that's it. And what would've been the alternative?

http://www.csmonitor.com/USA/Election-2010/2010/0809/Election-2010-a-fight-over-jobs-and-recovery-vs.-deficit-and-debt

They have invoked a paper by economists Alan Blinder of Princeton University and Mark Zandi of Moody's Analytics, a former adviser to GOP presidential candidate John McCain, that asserts that absent vigorous government intervention in the economy, including bailouts and stimulus spending, "GDP in 2010 would be about 11.5 percent lower, payroll employment would be less by some 8.5 million jobs, and the nation would now be experiencing deflation.

>>What on Earth makes you think that "letting the tax cuts expire" will result in a sudden massive influx of cash to the federal government...

What on earth makes anyone think that a sudden, massive influx of cash to the fedgov is a good thing in the first place?

Seriously, can anyone show how government has *ever* created economic value through spending tax money, as distinct from simply redistributing it?  Even when given the opportunity to run a business, they tend to screw it up...or operate businesses that can't exist outside nanny gov's protective embrace.

Ooh! Ooh! I know! They could foster a free, open and fair marketplace where people can pursue their own enlightened self interests through a system of strong property protection, enforceable contracts, reasonable liability, and a wide presumption of liberty...but I know, I know, that's just crazy talk.

Let's get back to a real solution, like figuring out how to screw a few more drops of blood out of peter to pay paul...or was it paul's turn in the barrel this week?

Show me the numbers from a nonpartisan or primary source that this is true. Because we have heard this before...  

Yes, we have, and you're reverting to form.

You're misusing the term "primary source". Again. And after I've re-pointed that out to you on the other thread.

And after you demand a "nonpartisan" you link to "factcheck.org".

You can go look at the government figures, they're quite easily found. Tax revenues went up after the tax cuts went into effect.  The claims are that they would have gone up more, natch, had we not had those eeeevil tax cuts.


 So then why all the certainty then?

As always, it's back to base foundational principles.

Demonize investment, you'll get less of it. Make things less certain, and people will demand much higher returns (and risk being demonized as "ripping off")....  

There's a reason we predicted pretty much the route we'd be taking here, because we assessed the situation, and predicted that businesses would be under attack, subjected to massive new costs and taxes and uncertainty, and that would cause them to respond  rationally.

You're the one who assured us that that wasn't going to happen, and the un-defined "good capitalism" was going to save the day.

But you're trying to again, jump past the basics into heavy PhD level economics.  I take it you don't know any PhD economists.  I do.  *ahem*.

Stick to the basics, first.  Just even do the bare minimum and ask yourself "Self, what would it take to start a company and hire people?".  Do the math on that.

geek, most economists agree that the cash we would get from letting the tax cuts expire won't completely solve everything. I agree with this as well. In fact, I'd like to see a reduction in spending across the board even though Kruggman says we should spend more. It might mean that it will take us longer to get out of this recession but the deficit is a concern. Since we have been higher in both deficit and debt to GDP in our country's history, I'm not ready to throw myself off a cliff yet but it is clearly something that needs to be addressed.

That's why I'm happy that both the GOP and the Dems are going to wait until we hear what the bipartisan commission says on December 1.

Let's hear some direct refutation of these statistics provided here.

It's been refuted, it's easily found, and you still won't understand it.

Unix, this isn't a referendum on me. It's a debate on whether or not "During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE"  is an accurate statement.

You're right, it's not a "referendum". The rest is erroneous.

Here's a rebuttal, graphically:

http://www.heritage.org/budgetchartbook/federal-government-revenues

http://www.washingtontimes.com/news/2010/feb/3/bush-tax-cuts-boosted-federal-revenue/

From 2004 to 2007, federal tax revenues increased by $785 billion, the largest four-year increase in American history. According to the Treasury Department, individual and corporate income tax receipts were up 40 percent in the three years following the Bush tax cuts. And (bonus) the rich paid an even higher percentage of the total tax burden than they had at any time in at least the previous 40 years. This was news to theNew York Times, whose astonished editorial board could only describe the gains as a "surprise windfall."

So yes, that statement was completely accurate.

The CBO numbers provided in the footnoted link here do as well.

There's a major problem with ever using CBO numbers.  Do you know what it is?

I do.  Betcha DJ does. Betcha Kevin does.

Let's take a look at this statement, shall we?

>>In 2003, 450 economists,
Conceded: they are economists. From reading the overall text of the statement, they all seem to be proceeding from the Keynesian point of view, which survives, zombie like, despite being discredited in many credible eyes.

>>including ten Nobel Prize laureate,
The Nobel prize's credibility jumped the shark when it honored AlGore, and confirmed its lack of credibility when it awarded a prize to Obama at a time when his greatest achievement was having held the office of POTUS for what...11? 12?...days?

>>signed the Economists' statement opposing the Bush tax cuts, sent to President Bush stating that
Conceded. They sent a letter.

>>"these tax cuts will worsen the long-term budget outlook...
Everyone knows the budget is out of whack with the means to pay for it. You either have to cut spending, increase taxes, or play voodoo games with negotiable instruments. People wanting the budget to include more stuff are going to object to any contrary phenomena.

>>will reduce the capacity of the government to finance Social Security and Medicare benefits
And the Constitutional authority for that comes from where? (Crickets)

>>as well as investments in schools, health,
And the Constitutional authority for that comes from where? (Crickets)

>>infrastructure, and basic research...
And the Constitutional authority for that...is highly conditional, restricted to certain circumstances.

>>[and] generate further inequalities in after-tax income."

SINCE WHEN IS IT THE GOVERNMENT'S JOB TO EQUALIZE AFTER TAX INCOME? 


So, in short, many apostles of a dubious economic religion complain that the Bush policies interferes with the ability of the government to engage in extra- Constitutional expenditures and social engineering.

For me, that's not a bug. It's a feature.

 The Reagan Tax Cuts: Lessons for Tax Reform


"The Reagan tax cuts, like similar measures enacted in the 1920s and 1960s, showed that reducing excessive tax rates stimulates growth, reduces tax avoidance, and can increase the amount and share of tax payments generated by the rich. High top tax rates can induce counterproductive behavior and suppress revenues, factors that are usually missed or understated in government static revenue analysis. Furthermore, the key assumption of static revenue analysis that economic growth is not affected by tax changes is disproved by the experience of previous tax reduction programs. There is little reason to expect static revenue analysis to evaluate the economic or distributional effects of current tax reform proposals much better than it evaluated the Reagan tax program 15 years ago."

This report was prepared in 1996. Neo-Keynesian monetary policies fail once again.

Unix, just to recap a couple things here before we go any further...   
   
Washington Times, Heritage Foundation, you, DJ, some others here-accurate   
   
CBO, Treasure Dept, Joint Committe on Taxation, WH Council of Economic Advisors, Mankiw, Viard-inaccurate   
 
Agree or disagree?  
 
Some questions...   
   
Does federal revenue, as a rule, increse every year?   
   
Do you think that the Laffer curve is a valid measurement? Do you agree with supply side economics?
   
Are you saying that factcheck is biased? If so, what is factually inaccurate in the link I have provided?

Part I

"Show me the numbers from a nonpartisan or primary source that this is true."

Okay, I will.

The proposition is that:

"During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE."

The premise on which this proposition is based is that:

"... a change in the RATE at which a particular economic activity is taxed results in a change in the willingness of people to engage in that activity, and thus a change in that activity, and thus a change in the tax REVENUE which taxing that activity produces."

To prove to the proposition, it is sufficient to show that income tax revenues to the feddle gubmint increased over time after the Bush tax cuts went into effect.

To prove the premise to the proposition, it is sufficient to show that the income tax revenues increased over time as economic activity increased over time after the Bush tax cuts went into effect.

The Bush tax cuts began in 2001 with The Economic Growth and Tax Relief Reconciliation Act of 2001, thus the last fiscal year before these tax rate cuts apply was 2000.  Many of these tax rate cuts were originally designed to be phased in over nine years, and would then expire after the tenth year. However, in 2003, the phase-in period was shortened by The Jobs and Growth Tax Relief Reconciliation Act of 2003.

The primary source for data on income tax revenues of the feddle gubmint is the US Treasury Department. I presume we can trust the figures they have provided. Thus, we begin with the Treasury web site, which is at http://www.ustreas.gov/

On that page, we click on "Bureaus" and arrive at http://www.ustreas.gov/bureaus/

On that page, we click on "The Financial Management Service (FMS)" and arrive at http://www.fms.treas.gov/index.html

On that page, we click on "Combined Statement of Receipts, Outlays and Balances (annual)" and arrive at http://www.fms.treas.gov/annualreport/index.html

On that page, we click on "Back Reports" and arrive at http://www.fms.treas.gov/annualreport/backissues.html

On that page, we click on "Combined Statement of Receipts, Outlays, and Balances for Fiscal Year XXXX", wherein XXXX is available for the years 2001 - 2008. Each link brings up a page on which each report is broken into many pieces partses, each of which is in the form of a .pdf file.  We are concerned with the part titled "Receipts by Source", which we can download from a link we find as we scroll down the page.  In these .pdf files, we find the individual and corporate income tax revenues for fiscal years 2001 - 2008.

For fiscal year 2000, the file is in a different format, so we directly download the "Annual Report for Fiscal Year 2000", wherein we find, on page 11, the individual and corporate income tax revenues for fiscal year 2000.

Thus we have, finally, the individual and corporate income tax revenues of the feddle gubmint for fiscal years 2000 through 2008, all from a primary source, namely the United States Treasury.

Part II

I have prepared a spreadsheet which shows both the individual and corporate income tax revenues by fiscal year, which I obtained as described above. It compares the income tax revenues of each year from 2001 - 2008 to the base year of 2000, which was the last fiscal year before the Bush tax cuts were applied.

It is important to understand two things: 1) a tax rate cut occurs in a "stepwise" fashion, i.e. the rate is one value one day and another value the next; and, 2) the effects of a tax rate cut on economic activity occur in a much more gradual fashion over a much more prolonged period.  Thus, if a tax rate cut occurs, one might expect to see an initial drop in tax revenue due to the stepwise change in the applied rate, followed by a rise in tax revenue over time as economic activity increases over time. Because of the phase-in of these tax rate cuts over several years, we should expect this transition period to be rather prolonged.

Thus, if the proposition is correct, and the explanation of the premise is correct, then we would expect to see a drop in tax revenue in 2001 compared to 2000, followed eventually by a rise in tax revenue as the fiscal years go by. In particular, we should eventually see a notable rise in corporate income tax revenue, which would indicate a corresponding rise in business activity.

I have made a .jpg snapshot of this spreadsheet and posted it below. It shows that, compared to 2000, individual income tax revenues were less in 2001 - 2005 and then were greater in 2006 - 2008. It shows that, compared to 2000, corporate income taxes were less in 2001 - 2004 and then were greater in 2005 - 2008, compared to 2000.

The proposition is proven, Q.E.D.

It shows a remarkable rise in corporate income tax revenues, indeed peaking at 78% in 2007.

The premise is proven, Q.E.D.

Will he bail, or try the strawman defense? DJ did a stone cold bitch slap, a reasoned, articulate, and logical refutation of idiocy. With footnotes.  Anyone think Mark will EVAH be back to this thread? Anyone?

"Does federal revenue, as a rule, increse every year?" 
 
Teacher boy, read the comment I posted just before this one. Follow how I found the numbers, provided by the US Treasury, which would answer that question. 
 
You don't have GUESS, you can find out FOR REAL. 
 
You don't have to ask the question of others, you can find out FOR YOURSELF. 
 
Now, do you see why we hammer on you to quit jumping to conclusions, find the facts for yourself, and reason from facts to conclusions?

Unix, just to recap a couple things here before we go any further...     

The real recap is no, you can't evaluate information, and no, you're not learning anything.

So you fall back on logical fallacies.

Washington Times, Heritage Foundation, you, DJ, some others here-accurate          
CBO, Treasure Dept, Joint Committe on Taxation, WH Council of Economic Advisors, Mankiw, Viard-inaccurate     


Nope. Totally disagree. Not what I said, and I'm not going to argue in your strawman factory.

Some questions...     

You've got literally dozens of questions I've asked you, asked to clarify and to determine truth, not obfuscate.

Does federal revenue, as a rule, increse every year?     


Nope.

Do you think that the Laffer curve is a valid measurement? Do you agree with supply side economics?  


The "Laffer Curve" isn't a measurement, so no.  Supply side economics - Mark, you ain't even close to being able to understand what I think about economics.  I essentially minored in it in college, my father is a PhD economist, his father was an economist.
How about you manage to answer some basic supply/demand curve and floor/ceiling questions before you try and launch into macro-econ?
(And no, claiming that the sale price of footballs is biased won't work.)

Are you saying that factcheck is biased? If so, what is factually inaccurate in the link I have provided?

Factcheck isn't so much biased as a false flag operation.  What's factually inaccurate?  Damn, dude, you don't go outside in thunderstorms, do you?

In the meantime, you can just answer DJ. Good luck.

DJ, I'm not going to dispute that there is valdity to the idea that cutting corproate taxes attract corporate growth and increased federal revenue from this. That AEI study from three years ago showed some evidence of this although it's not entirely clear if this is completely applicable to the Untied States. But I'm willing to give them (and you) the benefit of the doubt. The numbers do make sense.

Still, I have do have some issues with your numbers. They're not really honest because they don't take into account that the cuts you are talking about are deficit financed. The tax cuts enacted in 2001 increased the deficit over half a trillion dollars by 2005. So when you say that they "increased revenue" it really makes no sense if you don't consider the deficit. The other issue I have is that you don't accurately characterize the fall off from 2001-2003 and then use 2004 as a starting point which, if you measure those numbers as a share of the economy, they were at their lowest levels since 1959.

In other words, you are looking at a small window of the business cycle and measuring growth based within itself to prove your point. How about creating a table comparing the period of 2001-2007 to...say....a 1990s business cycle following tax increases? Let's see those tables side by side. While we are at it, let's also see some data on historical averages (percentages) of receipts to GDP. The way I see it is that your increased revenue is simply a return to historical averages. Do you think that the growth that you list here has made up for the extraordinary weak growth from the previous years? Even your own table shows this as well as a drop off in 2008.

If your statement had been "During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in ECONOMIC GROWTH"  then you would've been more accurate. And honest. Mankiw, thankfully, is at least honest in his study regarding whether or not any of this makes up for lost revenue in his study.

http://economics.harvard.edu/faculty/mankiw/files/dynamicscoring_05-1212.pdf

Further, Bush's own Treasury Department gamed out extending the tax cuts and found that there would be negative effects.

http://www.ustreas.gov/press/releases/reports/treasurydynamicanalysisreporjjuly252006.pdf

Among the findings...

Best case scenario? Making these tax cuts permanent would have little effect on the size of the economy (0.7 percent). This study also found that the tax cuts would not, in fact, "pay for themselves" and some worst case scenarios called for lost revenue. They also suggested that small tax increases at the time (2006) would be better than a big one later.

Unix, federal revenue does, in fact, normally increase every year. Since 1962, revenue has declined in only five years. Check the historical tables. When you have a long run of economic growth, inflation, a growth in population/more people entering the work force and increases in wages, you are going to have an increase in revenue and tax policy will have nothing to do with it.

They're not really honest because they don't take into account that the cuts you are talking about are deficit financed.

They're completely honest, you're completely lost.

In the context of tax revenues, there's no such thing as "deficit financed".  You're trying to muddy the waters rather than learn something again.

The "deficit" is a function of spending, not collection, and as such, has nothing to do with tax receipts. Which is the subject of the conversation.

So you've changed the subject from DJ's point to your own strawman. That doesn't make DJ wrong.  You might say, ah, but in another context, the cuts.... Which is what most of your sources are saying.


You've never answered if you know why the CBO numbers have an issue.  Wonder why.

Unix, federal revenue does, in fact, normally increase every year. Since 1962, revenue has declined in only five years. Check the historical tables.

I'm well aware of that.

You asked : "Does federal revenue, as a rule, increse every year?"

It doesn't, as a rule. Historically it usually does.  But that's not what it means by "as a rule".  As you say, it doesn't always.  And there's no "rule" why it should.

I answered the question you asked, and purposely didn't expand, because I knew you didn't know the difference.


If your statement had been "During the Bush administration, the feddle gubmint cut income tax RATES,which resulted in ECONOMIC GROWTH"  then you would've been more accurate. 

I'm glad to see your minor change on the point, as flawed as your understanding is, but even with that, I'll note you've missed the bigger picture while shifting contexts.  So now you're against growing the economy in bad times?

Unix, you'll get no argument from me that the spending of Congress is a concern (techincally, it's not Obama nor was it Bush' fault). My point in bringing up the deficit is that it is disingenuous to say that cutting taxes results in increased revenue when those tax cuts result in adding to the deficit. And that revenue in the time frame he mentions was honestly more restorative than anything else.

Simply put it's not enough to say "it is sufficient to show that income tax revenues to the feddle gubmint increased over time after the Bush tax cuts went into effect" and "it is sufficient to show that the income tax revenues increased over time as economic activity increased over time after the Bush tax cuts went into effect." if the word "result" is in this statement above...which it is. (During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE.) That's like saying Clinton raised taxes and that's why he balanced the budget and left office with a surplus. All of us know that is spin and the "surplus" was in deficit spending not the actual debt to GDP which stood at over 50 percent of GDP. And that there were many other factors that contributed to this.


Now, if DJ had said, "Bush Cut Taxes. Federal Revenue Went Up" that would be an accurate (yet misleading due to its intimating a correlation betweent the two) statement. As it stands, his data in his table is, in fact, insufficient to support his statement. Take a look at the graph on pg. 15 of the AEI report.

http://www.aei.org/docLib/20070731_Corplaffer7_31_07.pdf

This shows revenue as a perentage of GDP which is more illustrative of the revenue stream and the overall picture. This graph does indeed show that when the corporate tax rate goes down, revenue goes OECD countries. Remember, though, that Hassett told Factcheck that his study showed that smaller countries had the most success and it may or may not be correct to apply the study to the US. My point in linking the study, though, is to show a more accurate graph than DJ presented. Instead, DJ shows the perentage of change from 2000 which is nice but, again, not illustrative as the AEI graph which does, indeed, prove part of his point.

But did he take into account population growth, wage increases, more people entering the work force and inflation as other factors in measuring increased tax revenue?

The other thing to consider is the total per capita revenue growth in 22 quarters after the last business peak. For the period of 2001-2007 it was 1.7 percent. Overall, that's not stunning growth. The average for all previous post WWII Business Cycles was 12 precent. In the 1990s business cycles after tax increases it was 16 perecent.

None of this, of course, takes into account how much more revenue there would've been had there been no tax cuts at all. Would there have been a surplus?

Unix, I hope that when you respond to this you leave the strident language regarding me out of the comment. I want it noted that I have stuck to the subject at hand and not taken issue with some your comments (had I made them) you would've pounced on. Example: The fact that my mother is a elementary school principal of 30 years doesn't necessarily make me an expert on education. 8-)

I want it noted that I have stuck to the subject at hand and not taken issue with some your comments (had I made them) you would've pounced on. 

But you haven't stuck to the subject.

My statement was made to bolster my authority, not as an appeal to authority. Again, you don't understand anything about what you're talking about.  You insinuated I was uneducated as to economics. I'm not.  But I didn't insist that that was solely an authority - unlike your arguments quite often.  (Remember how you said *we* didn't respect educational institutions?)

My point in bringing up the deficit is that it is disingenuous to say that cutting taxes results in increased revenue when those tax cuts result in adding to the deficit. 

Then you have no point.  Because that's gibberish.

You've lost the argument to DJ, and can't admit it, so you're trying to obfuscate and change the subject.  But we've got more enduring knowledge than you do, and can see that.

Revenue = what you take in
Deficit = difference between what you take in and send out.

If you increase revenue, and increase spending, you (can) increase the deficit. Which is what we were mad about these last years with Bush, you might note.  But even if you can't note that, the discussion was on revenue. What increases revenue.

If you want to close the deficit, you increase revenue and decrease spending.

You advocate things that - you admit! would reduce revenue and increase spending, making your "point" even more ridiculous in the context of this site.

No, you haven't "stayed on subject", you've tried to change it - repeatedly, and you've tried to redefine words and concepts again.

DJ was correct, until you admit that, you are in error and have no enduring knowledge.

My point in bringing up the deficit is that it is disingenuous to say that cutting taxes results in increased revenue when those tax cuts result in adding to the deficit.

But the tax cuts did not result in adding to the deficit. They can't. Deficits are a function of outgoing money, not incoming money. If you do no spending, any income at all will result in a surplus. If you do more spending than you have money for, you will run a deficit no matter how much money you have.

Doesn't anyone competent to balance a checkbook know this? Hell, doesn't anyone competent to count their change know this?

My point in bringing up the deficit is that it is disingenuous to say that cutting taxes results in increased revenue when those tax cuts result in adding to the deficit.

OK, I admit I only had a year of Econ in my undergrad years, but that sentence made my head hurt and I could not force myself to read the rest of his post.

DJ was tasked to prove causality between Bush's tax cuts and increased revenue. Based on what he put up there, there is no evidence of this. Now, the AEI paper does show some evidence regarding corporate revenue but that includes other data that DJ did not include. Where is the causality? What about the other factors I have listed above?

In terms of the tax cuts and the deficit, I would point you to this:

http://www.cbpp.org/cms/?fa=view&id=966#_ftn1

The new CBO data show that changes in law enacted since January 2001 increased the deficit by $539 billion in 2005. In the absence of such legislation, the nation would have a surplus this year. Tax cuts account for nearly half — 48 percent — of this $539 billion in increased costs. [1] Increases in program spending make up the other 52 percent and have been primarily concentrated in defense, homeland security, and international affairs.


A growing number of studies from highly respected institutions and economists have concluded that the negative effect on long-term growth of the increased deficits that the tax cuts are generating is likely to cancel out — and quite possibly to outweigh — any positive effects on long-term growth from reductions in marginal tax rates and other tax incentives in the 2001 and 2003 tax-cut packages. Stated simply, the tax cuts are more likely to reduce long-term growth than to increase it.[2]

So, rather than the strident language directed at yours truly, demonstrate how they are wrong.

I spent a decent amount of time researching some of this stuff. The rest I already knew. In fact, I think I have a nice little unit created for the coming year so I do appreciate the discussion. If you want to debate my points, let's hear thoughts or counter evidence to all of them. I made it a point to search for evidence that proved DJ was correct and I did find some related to coporate revenue. But the rest of his argument doesn't stand up to the standards that have been set on here. Honestly, I think I've been pretty kind considering when you google "Bush Tax Cuts Boost Federal Revenue" and see this

http://www.google.com/search?hl=&q=bush+tax+cuts+boost+federal+revenue&sourceid=navclient-ff&rlz=1B3GGGL_en___US345&ie=UTF-8&aq=0&oq=bush+ta

or when you consider the black and white question and answer of this

http://www.factcheck.org/askfactcheck/have_tax_cuts_always_resulted_in_higher.html

Have tax cuts always resulted in higher revenues and more economic growth as many tax propoents claim? No, in fact economists say that tax cuts do not spark enough growth to pay for themselves.

It's pretty straight forward and backed up with plenty of source material for all to see and analyze.

DJ was tasked to prove causality between Bush's tax cuts and increased revenue. Based on what he put up there, there is no evidence of this.

He did exactly that. You changed the subject away from "revenues" and onto "effect on the deficit".

Where is the causality?

The tax rates went down, the revenue went up.  There it is.


What about the other factors I have listed above? 

They're another subject, you can't get this under control yet.  We cannot move onto things that rely on this knowledge and understanding while it's obvious you don' t understand this.

if you don't understand the basics, you won't understand the advanced.

And you don't understand the basics.

If you want to debate my points, let's hear thoughts or counter evidence to all of them.

You have yet to counter DJ's points, other than to assume they're wrong, and change the subject to something else. 

I spent a decent amount of time researching some of this stuff.

Spend more.

The rest I already knew. In fact, I think I have a nice little unit created for the coming year so I do appreciate the discussion.

Not if you can't separate deficit from revenue.  I begin to see why you can't answer which is more, 22 or 15. You really don't know, do you?

It's somewhat funny, that the "teacher" here can't manage an "Enduring understanding" of a common theme here.

He says something, many people object, and it ends up with someone going toe to toe with him, and at the end, ending up, every time, "wait, you don't UNDERSTAND [some basic fact/word/concept]??"

Of course, sometimes we start off telling him that from the get-go, but it almost always proceeds down that line.  And he wonders why we can reply to him so quickly.  All you have to do is ask about something, anything that's in the hierarchy of knowledge....

No, the data in my table show that, after the income tax RATES were cut, income tax REVENUES increased,  
 
That's true...your table did show that but it does not show causation.  
 
And you know as well as I do that if you are going to talk about tax cuts increasing revenue, it's much more honest to include a discussion of spending and the deficit. Your statement puts forth the notion that tax cuts spur increased revenue. The very idea of this means nothing when you offset this revenue with how much the deficit grew. "Increased revenue" sounds fantastic but we know that it really isn't and that is my whole point. See my link above in my last comment regarding more on the seperation of "deficit" and "spending" and how that figures into discussions of increaesd revenue.
 
As to your second comment, I'm with you somewhat on the corproate side of the equation. But I'm still wondering if you are taking into account the other issues in my various posts above. For example, we are talking about revenue, right? So, if revenue (as a share of the economy) is at is lowest point since 1959 in 2004, doesn't that set the bar low? And increased revenue look pretty darn amazing? I wouldn't characterize that as "diving off into the weeds."  
 
I'd also still like to see, as in the AEI study, percentage of GDP over the years and a comparison to other eras to get a more illustrative view. And don't you have to adjust for inflation, increased wages/new wage earners, and population growth when considering these revenues?  
 
Unix, more strident language and failure to address my overall points to DJ's statement. I'll keep checking back.   
 
GOF, check the link in my above post for a more detailed explanation of this connection.

Unix, more strident language and failure to address my overall points

No, it's not a failure, because you didn't make points.  Furthermore, we're not talking "overall" we're talking specific points.

Which you can't.

if you are going to talk about tax cuts increasing revenue, it's much more honest to include a discussion of spending and the deficit.

No, it's not, and you know it. Or should.  You're demonstrating that you don't understand, much less enduringly, what you're talking about.

This is an essay test. One you're failing.

Spending, and the deficit are important issues, not germane to discussions about increasing revenue.


Your statement puts forth the notion that tax cuts spur increased revenue.

No, it defends and demonstrates that.

The very idea of this means nothing when you offset this revenue with how much the deficit grew.

It means if we spent less, there's be less (or no) deficit!

Spending has nothing (for all intents and purposes here, you're failing high school econ here, we won't go into advanced MBA issues) to do with revenue.

DJ has explained this in great, graphic, easy to follow ways.

And don't you have to adjust for inflation, increased wages/new wage earners, and population growth when considering these revenues?   

And we're back to "But what's a mine???????? It's UNFAIR!!!!"

Mark, you're looking for excuses to avoid admitting that DJ has, quite literally, schooled you.

It's not always the teachers fault when the student fails.

Now THIS is interesting. Go read

http://www.realclearpolitics.com/articles/2010/08/25/where_are_the_new_jobs_106876.html

Recall a comment of mine from yesterday. Regarding a quoted excerpt from a HotAir article, I wrote:

"See those highlighted parts? The guy who manages my investment portfolio confirmed it to me, and he used the same words. He told me that many trillions of dollars were pulled from the market as the Obamateur administration ramped up its agenda, and they will remain uninvested until, quite literally, "They know what the new rules are," meaning the new conditions under which those investments will be made. Congress and the Obamateur administration are killing the incentive to invest and expand, and those with money to invest and expand are behaving accordingly."

Now, John Stossel state (emphasis added):

"The problem today is that the economy is not being left alone. Instead, it is haunted by uncertainty on a hundred fronts. When rules are unintelligible and unpredictable, when new workers are potential threats because of Labor Department regulations, businesses have little confidence to hire. President Obama's vaunted legislative record not only left entrepreneurs with the burden of bigger government, it also makes it impossible for them to accurately estimate the new burden."

and

"Nothing more effectively freezes business in place than what economist and historian Robert Higgs calls "regime uncertainty.""

and

"Higgs says: "Unless the government acts soon to resolve the looming uncertainties about the half-dozen greatest threats of policy harm to business, investors will remain for the most part on the sideline ... consuming wealth that might otherwise have been invested.""

This is what happens when amateurs are in charge of gubmint.

Honestly, I don't think it's intentional.  He can't help being irrational.

It may not be intentional, but he can help being irrational.  So I have to disagree with you there, Kevin.

Sure, the educational system taught him the "wonky way" to view the world, and he "lenses" the world through those glasses.  He should get rewarded for effort, not result, and you're your own best judge.  Right.

But he could change, if he'd stop being so stubbornly insistent that his (easily demonstrably as massive hypocritical) intellect, (easily demonstrable as massively free of principle) conclusions, and his vocabulary (need I describe that) weren't superlative.

It's been proven, even to him, time and time and time again.  And yet he persists.  (The only principle that he actually can be accused of of holding to is "Give my guys power to point guns at everybody else")

But he doesn't see that, no matter how many times we break it down to elementary pieces and attempt to lead him to at least understanding of where our principles are.

And this does not bode well for our future as a nation.  You cannot debate something on which you have differing first principles - it's a useless exercise.


Sowell's point is a good one, but I think even that's too advanced for this.  In order to have that problem, you have to have first principles.  I don't think that he does. And I know if you asked him to define them, he couldn't.

Somewhat ironically, this reinforces what we're saying about the Educational System.

Linoge-Let's take a look at  it again.


During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE.

As I have stated a couple of times in this thread, as long as the word "resulted" is in there, it is false. That word comes out, and his statement is valid but still intimates causality and/or correlation and there is none. The only possible exception would be the corporate revenue side but that has not been fully proven. As I have stated in many of my other comments here, there are other factors that contributed to the increased tax income...factors that he did not list in his analysis. I would ask you kindly to re-read those comments and links for further detail, facts, figures, and analysis.

I do grasp the difference between gross and net income....DJ is talking about gross revenue's increasing and not what is our actual income when coupled with spending. My reason for pointing at the deficit is how disingenuous it makes his statement. It's a comment more than a connection...although if you read the link I have provided above it is detailed as more. If you disagree with the CBO's assessment, let's hear why. Remember, though, my comment about the deficit was only one of several that have been made on DJ's statement. I'd be interested to hear your thoughts on my other points.

Unix and DJ, let's try this again.

1. Please explain how revenue percentage of GDP would factor into your analysis. Kindly refer to the AEI report linked above (pg. 15) for a more accurate chart of how cutting corporate taxes boosts revenue in countires around the world which may or may not be true here in the US.

2. Please describe how inflation, a growth in population/more people entering the work force and increases in wages factor into the increase federal revenue.


3. Please compare the period of 2001-2007 with other 22 month business cycles from either the 1990s or another cycle of your choice...post WWII. How are they the same? How are they different?

4. As a bonus question, demonstrate critical thinking regarding the Laffer curve. What are your thoughts on Mankiw's analysis of the Laffer curve (pg. 169-171 of Principles of Microeconomics, 3rd Edition)? Here's a quote as a primer

There is no debate about the general lesson: How much revenue the government gains or loses from a tax change cannot be computed just by looking at tax rates. It also depends on how the tax change affects people's behavior.

So, there is more to it than your statement, DJ. This will be the third time I have asked these questions. Can you answer them without resorting to more strident language about myself?

Also, why the comment on Obama? I thought we were discussing whether or note federal tax cuts raise revenue.

Just so we have all of our ducks in a row...let's bring the CBO report down here.  
 
http://www.cbo.gov/ftpdocs/69xx/doc6908/12-01-10PercentTaxCut.pdf  
 
A summary from Wikipedia:  
 
 
In the paper's most generous estimated growth scenario, only 28% of the projected lower tax revenue would be recouped over a 10-year period after a 10% across-the-board reduction in all individual income tax rates. The paper points out that these projected shortfalls in revenue would have to be made up by federal borrowing: the paper estimates that the federal government would pay an extra $200 billion in interest over the decade covered by his analysis.  
 
It's a more specific summation of how tax cuts are related to the deficit. So, I guess this would be point #5 to add to my list above. Comments on the CBO report? It's only 8 pages.

Mark:

The way you get to understanding is simplifying, as I've tried to show you.  You want to obfuscate, so you can claim that your conclusion is valid, despite multiple foundational steps being obviously incorrect, erroneous, or at best, arguable.

let's bring the CBO report down here.    

Let's first have you answer my outstanding question:

What must you know before you can cite the CBO?



During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE.  

As I have stated a couple of times in this thread, as long as the word "resulted" is in there, it is false.

So that would make it:

During the Bush administration, the feddle gubmint cut income tax RATES, which [in] increased income tax REVENUE.  

The statement is still true if we remove your word.  The meaning is unchanged. So what was your "point", again?

That word comes out, and his statement is valid but still intimates causality and/or correlation and there is none. 


That there is none is a statement of conclusion on your part that you have not even attempted to prove.  You can make the argument that it is coincidental - that is, and I'm sure DJ will agree, an arguable proposition. Argueable. Not proven. 

Moreover, DJ already dealt with that argument and provided evidence against it.  If you understood the argument, you'd know that.  That's not to say DJ proved his point - from a purely devil's advocate side, it's still arguable.  But you'd have to deal with his argument, not just dismiss it.

Now, if you want to deal with that? Fine. Go ahead and do it. (And there's a reason I'm not specifically pointing to it, because I don't think you know where it is.

Please explain how revenue percentage of GDP would factor into your analysis.

Totally irrelevant, given the proposition we're working with.

Please describe how inflation, a growth in population/more people entering the work force and increases in wages factor into the increase federal revenue.  

Mostly irrelevant, given the proposition we're working with.  In case someone who knows something reads this, first, "inflation" isn't an issue, since the dollar values are equalized to a standard, and if you understood the material, you'd know that, and the second is more complicated; however, you saw a decrease until the cuts, despite the assumed (you didn't prove more people entered the work force, you just assumed it) increase in the work force.

Please compare the period of 2001-2007 with other 22 month business cycles from either the 1990s or another cycle of your choice...post WWII. How are they the same? How are they different?  

Teacher boy, you're not the instructor here, you're the gadfly, the "know it all" who knows nothing - demonstrably.  All that said, guess what?
Totally irrelevant, given the proposition we're working with.

By the proposition's definition, it's only for the post-2000 years.  You're trying to change the subject to avoid admitting DJ is right, or more likely, admitting you don't know what you're talking about.

As a bonus question, demonstrate critical thinking regarding the Laffer curve.

"Demonstrate critical thinking" - how would you know? You can't even manage to stay with the proposition we're working with.  You've yet to ever, once, demonstrate critical thinking skills, you're not a competent judge. You might as well send me to the Westminister Dog Show as to judge true critical thinking skills.

Anyway, it's totally irrelevant, given the proposition we're working with.

Funny how these things keep coming back to a simple given.Or maybe not.

Just so we have all of our ducks in a row...let's bring the CBO report down here.    

Your ducks are all over the migration pattern.

A summary from Wikipedia:

Why do we need a summary from wikipedia?  

It's a more specific summation of how tax cuts are related to the deficit.


Ah, but it's not, not at all.  It's an estimate.

There is a huge difference between an estimate, and a summation.


So, Critical Thinking time. Which is more valuable. An estimate* or the real numbers?

* - There's an asterisk there, still waiting on you to tell us what you have to know - and disclaim - about CBO reports.

Unix, using the word "which" or "resulted" is basically saying the same thing. The more accurate statement would be: During the Bush administration, the feddle gubmint cut income tax RATES. During the Bush Administration, federal revenue increased.

There's nothing technically inaccurate about those statements but it still does imply causality and correlation. As to the rest of your comments, I disagree. These other factors are vey much relevant when considering a rise in revenue. Is it accurate to say, then, that you disagree with the Mankiw quote above?

If you disagree with the CBO estimates, that's fine. Why? Show me your reasoning and your points.

If you disagree with the CBO estimates, that's fine. Why? Show me your reasoning and your points.

I already did.

And everything I said stands repeated, they're irrelevant, given the proposition in question.

But you can't evaluate that.  Can. Not. Will not learn the skills, or even try.

Where? I don't see them anywhere. All I see is more strident language directed at me.  
 
I can evaluate what you are saying. I disagree given the evidence researched and the information presented by DJ. There are, in fact, several relevant factors in determining the rise of federal revenue and simply looking at a change in tax rate is not sufficient to use the word "resulted."
 
I'll ask you again...do you agree or disagree with this statement?  
 
There is no debate about the general lesson: How much revenue the government gains or loses from a tax change cannot be computed just by looking at tax rates. It also depends on how the tax change affects people's behavior.   

UJ, stop being so mean! Can't you see his self esteem is hurting? And you just don't care!

Stop making him answer basic questions about stuff! He's more of a big picture kind of guy, one that understands feelings and people and stuff. And the less defined it is, the more stuff he knows.

Oh, and 15 and 22 are the same number, if 15 really believes in himself, why, he's just as big as mean ol' 22. I bet you and 22 are friends, aren't you? You cad!

I don't see them anywhere. All I see is more strident language directed at me. 

And there is the problem.

All you can see is the language. You can't see the concepts. Even when DJ spoonfed it, and gave you detailed directions, you couldn't see the concepts, or the data, all you could see is the "strident language".

Right there is the problem, and it's why Kevin, and I, think that there's no possible way to save the educational system. You've been taught to look at language, not concepts, not data, but what makes you feel good.  Not what's true, not what's definable, not what's reducible. 

I can evaluate what you are saying.

Then why haven't you? You're misleading yourself when you say that - after you've demonstrated quite clearly that you cannot evaluate what we're saying. 

I disagree given the evidence researched and the information presented by DJ.

You've yet to make a case for that. You've tried changing the subject repeatedly, rather than deal with the simplest of your errors.  Note the plural. Oh, sorry. Plural means "more than one".

There are, in fact, several relevant factors in determining the rise of federal revenue and simply looking at a change in tax rate is not sufficient to use the word "resulted."

We're still waiting for you to present the first of those "several relevant factors".  Not good for your claim that you understand the subject matter.

But this means that  - in opposition to what you said earlier - you now agree, that tax RATES dropped, and tax REVENUE went up? Yes?

Russell:

Sorry, can't. Rush told me to be mean, and that 22 was more than 15.

Mark: If you disagree with the CBO estimates, that's fine. Why? Show me your reasoning and your points. 

Me: I already did. 

Mark: Where? I don't see them anywhere. All I see is more strident language directed at me.


In the spirit of the relaunch (though the plating is starting to wear thin), let me back up and be explicitly clear on that.

Because I wasn't before, perhaps intentionally, and probably more to demonstrate that Mark doesn't understand what's being said TO him, he can only listen to the "tone", and can't evaluate the data, or the concepts.

So let me rectify that.

The CBO study (and you keep dodging the very relevant question about the CBO, something you must understand to cite it (and that none of the major media bothers to understand.)) was from 2005. Or right after the Bush tax cuts (Which weren't flat 10%, like the CBO estimates).

Why would you use estimates when the time has passed and we have *real data to compare*?

That's not to say the estimates are *worthless*, but there's of no use given the proposition we were discussing, since we have real historical data.


I don't need to refute it, the tax receipts do that for me.  The CBO estimate* (I'm waiting on YOU for the disclaimer here) wasn't correct, and we know that now.


That's what I meant, when I referred you to the data DJ has collected. Real data. Not theoretical. Not with assumptions. But Real. Data.  You called the CBO report a "summation", and it's not.  It's a estimate.

Let me illustrate for you, and no, there's no bias in using this example.

Estimation:
2009, Aug "The Detroit Lions are going to win the Super Bowl! This is the Year!"

Summation:
2010, Feb "The New Orleans Saints won the Super Bowl 31-17 over the Indianapolis Colts"

Unix, I honestly didn't "see" them...I have noticed that Echo sometimes shows comments and then they mysteriously vanish.

I get where you are coming from on the CBO report. Remember, though, that I was using it as summative example of illustrating the relationship between the deficit and revenue. I realize that it is an estimate and it is from 2005. That is why I included the other data from above.

My ego is just fine, Russell. In fact, I've really enjoyed this discussion. I got a jump on some stuff that I was going to do in a few months anyway and it has solidified my knowledge in some key areas. In fact, my research in examining the validity of DJ's statement have led to some enduring understandings regarding these concepts.

Now, I will ask you for a third time...as it directly relates to DJ 's statement.

Do you agree or disagree with this statement?    
   
There is no debate about the general lesson: How much revenue the government gains or loses from a tax change cannot be computed just by looking at tax rates. It also depends on how the tax change affects people's behavior.    

 Remember, though, that I was using it as summative example of illustrating the relationship between the deficit and revenue. I realize that it is an estimate and it is from 2005. That is why I included the other data from above.  

Then you don't understand what you are saying.

The proposition had nothing to do with the deficit.  That's a strawman you threw in there either intentionally or non, to obfuscate, and refuse to clarify and get foundational principles agreed upon.

You included it in a "rebuttal" to the proposition which is:

During the Bush administration, the feddle gubmint cut income tax RATES, which [in] increased income tax REVENUE.    

Nothing about deficits.  

 In fact, my research in examining the validity of DJ's statement have led to some enduring understandings regarding these concepts.  

*sigh*

Kevin, wanna push the button?  It's the only way to be sure.

I have attached a copy, right out of Wikipedia, to show the graph that Arthur Laffer came up with to illustrate the concept.   
 
Unix, take a look at the link.  
 
http://en.wikipedia.org/wiki/Laffer_curve  
 
Now look under "Research, Quantification, and Empirical Data." See the reference to the CBO? That's where I got the summation. Whether it is an estimate was not the issue. They are related.  
 
So, yes, I think the Laffer Curve is valid. It is not a measurement, it is an illustration of an economic concept, and I believe that economic concept is valid.  
 
Yet, according to Mankiw (pg. 170 of Principles)  
 
 
"Subsequent history failed to confirm Laffer's conjecture that lower taxes would raise tax revenue. When Reagan cut taxes after he was elected, the result was less revenue, not more. Revenue from personal income taxes (per person, adjusted for inflation) fell by 9 percent from 1980 to 1984, even though the average income (per person, adjusted for inflation) grew by 4 percent over this period."  
 
So....why do you think it is valid again if historically it has been disproved?  
 
It is clear that, at the moment, you fall in with the group on the left.   
 
Actually, that's not true. I agreed with you somewhat on the corporate taxes/revenue and also disagreed with the Democrats proclamations that Clinton "raised taxes and left a surplus." Re-read what I wrote above.  
 
Where we disagree is that the Bush tax cuts caused revenue to increase. They did not.

Whether it is an estimate was not the issue. They are related.   

I don't play the critical pedagogy games.  There is some objective reality here, and you're doing your level damn best to hide that.

Why?

So....why do you think it is valid again if historically it has been disproved?    

Oh, and Re: the Laffer Curve?

Because I understand what it *is*.  It's valid. It's not been "historically disproved".  Just for the record.

And you've YET to prove you know how to cite the CBO reports (not suprisingly, since you cited them incorrectly.)

Or even admit that 22 is more than 15.  And you want to discuss advanced economics, and think that you can "teach" me something.

Actually, at this point I'm wondering why you are dodging answering a question regarding a statement by someone who (literally) wrote a book on economics. Let's be perfectly clear, once again:

DJ: During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE." 

Mankiw: There is no debate about the general lesson: How much revenue the government gains or loses from a tax change cannot be computed just by looking at tax rates. It also depends on how the tax change affects people's behavior. 

Do you agree or disagree with Mankiw?

Do you agree or disagree with Mankiw?

Yes.

More of the quote: "Economists disagree about these issues in part because there is no consensus about the size of the relevant elasticities. The more elastic that supply and demand are in any market, the more taxes in that market distort behavior, and the more likely it is that a tax cut will raise tax revenue. There is no debate, however, about the general lesson: How much revenue the government gains or loses from a tax change cannot be computed just by looking at tax rates. It also depends on how the tax change affects people's behavior."

Mankiw's statement doesn't in anyway conflict with DJ's proposition. DJ isn't computing the tax revenue based on changing tax rates, he's compiled data on what happened to the tax revenue after the tax rates changed.

Furthermore, Mankiw was speaking about the Laffer Curve and supply side economics whilst DJ was doing anaylsis of recorded data.

Actually, the entire section on the Laffer curve is quite interesting. It does show that the Laffer curve is valid on a smaller set of people who have their taxes cut. It also may be applicable in countries with much higher tax rates than our country.  
 
he's compiled data on what happened to the tax revenue after the tax rates changed.  
 
Again, if he had said "During the Bush Administration, the government cut income tax rates and then after that there was increased income tax revenue" technically that would've been a valid statement, although misleading by drawing a correlation where the was none. But by using the word "resulted" in there he declared causation and that is not valid. I'm stating that tax revenue increased due to other factors which I have listed above and that the word "increase" is not entirely illustrative when you compare to other business cycles.

Part I

"As I have stated a couple of times in this thread, as long as the word "resulted" is in there, it is false. That word comes out, and his statement is valid but still intimates causality and/or correlation and there is none."

Go back to ground zero, teacher boy. This chain of comments BEGAN with:

-----

YOU: "Let's see now...we've cut taxes twice under Bush and once under Obama.  
  
Did that work? Why or why not? How?" 
 
ME: "We have tried and tried and tried to teach this to you, and you will not learn it. I'll try again. 
 
During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE."

-----

I then proved the truth of that statement to you, using fiscal year income tax revenue figures provided by the US Treasury, by showing that income tax revenue INCREASED after the Bush tax rate CUTS went into effect, and you now state baldly that there is NO CORRELATION? You describe said correlation as NONE?

You are the most fundamentally dishonest person I have ever tried to communicate with, and I took a building contractor to both federal and state court three times, and WON all three times.

Now, go back and read ALL of my comments in this chain. Note that I have remained DEAD ON POINT. Your comments, as I noted before, are FILLED with Random But Important Sounding Gibberish, as you have tried over and over again to dive off onto tangents, all to avoid admitting the truth of my statement and validity of the proof that I provided.

I WILL NOT PLAY THIS GAME WITH YOU.

I will not discuss the tangents you dive off onto unless and until you deal honestly with the comments I have made. So far, you have utterly refused to do so.

If you want to be treated as an adult, then ACT LIKE ONE.

-----

I believe the concept is way over your head, teacher boy, but there is a bit of careful thinking and planning behind the response I gave to your questions, which I quoted above, and my comments which followed. My intention was to get you to understand a simple bit of history, such that the comments I would follow up with would have a better, more understandable context, and such that you would have less opportunity to dive off into the weeds, yet again, without contradicting yourself.

You have demonstrated, yet again, that you are incapable of engaging in such a discussion in an intellectually honest manner. It is simply beyond you.

So, I will proceed with the my comments anyway. See Part II.

Part II

In just over three months, the mid-term Congressional elections will take place. The campaigns are heating up and the bullshit is thick and smelly.

As was predicted years ago, the Dimocrat majorities of both Houses of Congress fell all over themselves as they voted to commit the feddle gubmint to spend massive amounts of money. That's what they do, and so they did it. Massive deficits now loom far into the future. Said incumbents now pose as Fiscally Responsible Good Guys, in a sleight-of-hand attempt to deceive voters and remain in office.

Part of that rhetoric is (and I expect we'll hear more of it) to let the Bush tax cuts expire. Their proposition is that, if income tax RATES rise, then income tax REVENUE will increase, and so the deficit will decrease. (And, I am ignoring the reinstatement of the federal estate tax, and so on).

The purpose of my response to your initial question was to demonstrate to you that this proposition is NOT NECESSARILY TRUE. In a brutally simple and verifiable manner, I showed you that the converse was NOT true when the Bush tax cuts were enacted.

Now, is the first sentence of the previous paragraph consistent with my previous comments on the matter? YES, IT IS, and I'll explain why.

I stated further (emphasis added):

"Their view is simplistic, viz., that if tax rates are increased, then tax revenue that results will increase, and that if tax rates are decreased, then tax revenue that results will decrease. That view is wrong, and history, in particular the history of the Bush tax cuts that are about to expire, demonstrate that it is wrong."

The reason that view is wrong is, as I stated explicitly:

"A change in the RATE at which income is taxed can result in a greater or lesser willingness of people to engage in activity that produces income. Whether or not it is greater or lesser, and the amount by which it is greater or lesser, depends on what the rate was changed from and on what it was changed to, i.e. the old rate and the new rate."

This observation is precisely correct. You WILL mischaracterize it, so, in even more simple English, I'll explain it further. If income tax rates are CUT, then income tax revenue might go UP or DOWN, if income tax rates STAY THE SAME, then income tax revenue might go UP or DOWN, and if income tax rates are INCREASED, then income tax revenue might go UP or DOWN. It depends on the change in the willingness of people to engage in activity that produces income.

Now, we come to the other observations I made in this thread, those regarding the observable fact that TRILLIONS of dollars of privately held capital are sitting on the sidelines, not being invested, and businesses are not expanding and hiring new employees, all because they are waiting to see just what the "rules" of doing so will become.

We find that we consumers, as well as investors and business owners and managers, are all faced with a few Damned Fucking Serious known unknowns: 1) will the Bush tax cuts be allowed by the Dimocrats to expire; 2) will the voters clean house (i.e. of both parties) in November; 3) will the Dimocrats lose their majorities in Congress, in particular their supermajority in the Senate; 4) and, if the Dimocrats do not extend the Bush tax cuts, and the Republicans win big, will the next Congress extend the Bush tax cuts (i.e. retroactively to 01/01/11), possibly over an Obamateur veto? Note that this is only the tip of a huge iceberg of questions regarding the future.

My purpose was to combine these two aspects and then ask a simple question.  The key observation in doing so is that the current HUGE level of economic uncertainty wasn't present when the Bush tax cuts were enacted. THUS, HISTORY IS NOT A RELIABLE GUIDE TO MAKE PREDICTIONS IN THIS SITUATION.

Suppose the Bush tax cuts are allowed to expire. The question is, WILL INCOME TAX REVENUE INCREASE OR DECREASE? Trying to answer before it happens means, in part, estimating which factor will dominate: an income tax rate change, or the economic uncertainties induced by a deliberately anti-business administration and Congress.

The answer is, I don't know, and YOU DON'T KNOW, EITHER.

The purpose of my previous comments was to education your miserable thick skull before asking that question such that you would understand that.

Now, do you begin to see how such a discussion could have proceeded in an intellectually honest manner, very simply and with civility, but it cannot even begin until you stop behaving like a childish little shithead?

Markadelphia: "But by using the word "resulted" in there he declared causation and that is not valid. I'm stating that tax revenue increased due to other factors which I have listed above and that the word "increase" is not entirely illustrative when you compare to other business cycles."

Do those goalposts get heavy as you drag them hither and yon?

DJ analyzed the data, his proposition was "During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE." Which he proved by aforementioned data. Rates went down, revenue went up. Revenue exceeded the projected amount from pre-tax cut rates.

DJ: "[The data] shows that, compared to 2000, individual income tax revenues were less in 2001 - 2005 and then were greater in 2006 - 2008. It shows that, compared to 2000, corporate income taxes were less in 2001 - 2004 and then were greater in 2005 - 2008, compared to 2000.  "


p = tax cuts. q = increased revenue.

If p, then q. P, therefore q. The argument is valid.



I'm going to quote Linoge: "You do understand, do you not, that removing the word "resulted" from DJ's sentence DOES NOT CHANGE THE MEANING OF THE SENTENCE, right? "

Your fixation on one word is all the more amusing since you've failed, repeatedly, to change topic and context away from DJ's proposition, tossing out more red herrings than Cobbett.

Mark: "I'm stating that tax revenue increased due to other factors which I have listed above [snip]."

Rephrase: "If tax revenues went up, it because of other factors. I've listed those other factors and that's why tax revenues went up."

p = tax revenues. q = other factors
If p then q. Q, therefore p. THIS IS INVALID! That's affirming the consequent.

That is something I have pointed out a number of times, and you still do it. Your argument is invalid. DJ's is not.

If income tax rates are CUT, then income tax revenue might go UP or DOWN, if income tax rates STAY THE SAME, then income tax revenue might go UP or DOWN, and if income tax rates are INCREASED, then income tax revenue might go UP or DOWN. It depends on the change in the willingness of people to engage in activity that produces income.  

I agree with this statement. But that's not what you said.

You said: "During the Bush administration, the feddle gubmint cut income tax RATES, which resulted in increased income tax REVENUE."  


There is no argument that revenue did increase. But it was not a result of the tax cuts. I'm not certain if you bothered to read my links or quotes but they demonstrate this to be true. There was increased revenue for a number of other reasons which I listed above in a summary of 5 points. I do not see a serious response to any of them nor do I see a response on the Mankiw quotes. Instead, you have resorted to more strident language aimed at me and have been, quite honestly, personally insulting.

I stuck to the point of your statement, researched the theory, provided data (some of which proved the statement to be partially true in regards to corporate revenue) and refrained from any personal insults. If you don't agree with that data, let's hear why. Rather than continuing with the strident language and personal insults, demonstrate how an increase in wages or a larger pool of wage earners did not account for the increase in revenue.

Linoge, if you can't be bothered to read my links and give my comments a short read, how can you make such a sweeping declaration regarding my argument? Start with my five points above and the Mankiw quote.

Russell, rather than play the fun game of semantics and modus ponens, I'd like to hear from you if you think the increased income tax revenue was a result of increased wages, more wage earners entering the work force due to economic growth, population growth, or inflation. I'd also like to hear how GDP and pecentage of revenue to GDP factor into increased revenue. Analyze DJ's period and compare it to other business cycles and show the causation between the tax cuts and the increased revenue.

 But it was not a result of the tax cuts.

I pointed out to you before  you did nothing but assert that. You in no way even attempted to prove it.

Your utter imbecility is staggering at times, but I thank you for proving our points.

I'm not certain if you bothered to read my links or quotes but they demonstrate this to be true

"if we bothered?"

I don't know why we would. You don't know the definition of "demonstrate".  None of your links - none - even remotely come close to demonstrating that.

Hell, Mark, you can't even discuss revenue. And you want to "discuss" the Laffer Curve and advanced macroecon.

Mark, this is a great thread. It really is. Because it's obvious that even you know you're wrong, and you cannot admit that.  You'll do literally anything to avoid it.

And after you're repeatedly schooled, you insist that your tone means you "won".

I can think of no finer proof for the need for atomic rearrangement of the school system.

Russell:

Russell, rather than play the fun game of semantics and modus ponens, I'd like to hear from you if you think the increased income tax revenue was a result of increased wages, more wage earners entering the work force due to economic growth, population growth, or inflation.

In other words:

Please do my work for me, cause I don't have a clue how to prove what I've stated is the case, and I'll be grading you on how well you do.

Mark:
Linoge, if you can't be bothered to read my links and give my comments a short read, how can you make such a sweeping declaration regarding my argument? 

Because he's got an idea how a proposition is followed and/or a clue about economics?

pecentage of revenue to GDP factor into increased revenue.

Socrates wept.

Russell, rather than play the fun game of semantics and modus ponens,

It's not a game. An invalid argument isn't worth the time to discuss. Any remedial student of logic can tell you that. If you cannot follow the basics of logic, you cannot form logical arguments.

I'd like to hear from you if you think the increased income tax revenue was a result of increased wages, more wage earners entering the work force due to economic growth, population growth, or inflation. 

I'd like to hear from you that you understood DJ's valid argument and have DJ confirm you do  understand his argument. I guess we can't always get what we want. Life's tough.

 > Linoge, if you can't be bothered to read my links and give my comments a short read...

You really have no idea what I said in my post, do you?  You genuinely, honestly, completely have not the foggiest what the words I strung together actually mean, do you?  Dear God.  You are like the very fucking embodiment of "I'm rubber, your glue". 

I never said I would not read your posts, you ignorant little halfwit.  In point of fact, the vast majority of my comment, and the comments preceeding it, all of which you almost entirely ignored, were in reference to your comments, and even quoted exact citations from those comments.  Do you not recognize your own words when they are quoted back to you?  Wait, do not answer that... 

Thank you, yet again, for proving that attempting to have a rational, logical, reasonable discussion with you is completely goddamned pointless.  Occasionally, I take leave of my senses, and believe that you understand basic words within the English language.  This thread has certainly disabused me of that notion. 

Truly, this has been amusing to watch.  Markadelphia is trying so hard to educate us all, but we just won't get it!  It must be horribly frustrating for him, being a teacher and all, to work so hard to no effect.

You see, the Laffer Curve isn't real!  There's no cause-and-effect when you drop tax rates and tax revenues rise.  "Correlation isn't causation" you see.  Why can't we all see that?  And, and the deficits keep getting bigger and the national debt keeps going up!  And they go up even more when tax rates are decreased!  It's so simple when you ask yourself the right questions!!

But we right-wingers have been brainwashed by Adam Smith and Fredrich Hayek and all those other know-nothings!  We don't understand that if you don't tax the rich and redistribute their wealth, you get iniquity!  Higher tax rates are GOOD!  Back when Eisenhower was president, the top marginal tax rate was 90%, and everything was fine!!  We can do it again!  Those evil rich people aren't paying their fair share!! There will be rainbows and unicorns!  The economy will recover!  Tax receipts will roll in, and we can continue to fund all those entitlement programs!  Why can't we understand that??  Paul Krugman keeps trying to explain it to the great unwashed masses from his pulpit at the New York Times, but we just keep voting against our best interests!

Like I said:  first principles - we don't share 'em.

Kevin:
This isn't even first principles.

Sorry to flatly argue with you here, but my understanding of the first principles difference is that "The need of the many outweighs the needs of the few". Ok, that's a first principle I disagree with, and so we can argue that, and end up wildly at odds.

Or "Government can do a better job allocating resources than the free market" - that would be at least a defendable "first principle" Sure. We're not going to end up agreeing when we disagree at the start that much.


Mark's not evincing any knowledge of any principles other than bigoted ignorance and unweaned arrogance.

He's skipped right past anything foundational and jumped right into sycophancy.  And somehow, he'll figure it out ... somehow. Later.

Ken, several of the comments above answer your question regarding GDP. I'm done repeating myself.

Kevin, where did I say any of that? I suppose based on past experience with me I can see why you would think those things. I will take some of the blame and responsibility for that. Mastiff's comments in the EDU thread inspired me to find common ground which I have in this thread (corporate revenue). I've even pointed out how the Laffer argument has some merit.

I stuck to the point in this thread, did research, presented my opinions backed up by facts, and in return, I received strident comments and personal insults. We can now add taunting and game playing to this list which makes me wonder if this topic can continue to be discussed seriously and/or if you are saying the things you saying in an attempt to drive me crazy. As I have stated before, I've enjoyed this discussion and benifited greatly from it.

I think, though, that unless an outside arbiter (perferably one with a knowledge of economics) that has no bias towards me (or anyone for that matter) comes in for analysis and feedback, we will see more of the same. I've got this page linked and I'll keep checking back to see if someone leaves a comment that offers serious analysis as opposed to strident comments, personal insults, taunting and game playing. If that happens, I will comment.

I stuck to the point in this thread, did research, presented my opinions backed up by facts, and in return, I received strident comments and personal insults. We can now add taunting and game playing to this list which makes me wonder if this topic can continue to be discussed seriously and/or if you are saying the things you saying in an attempt to drive me crazy.

This is why most of us laughed at the idea of students "assessing" (in which we used the word correctly and you did not) themselves.

You think you worked hard, thus you did well.

But you cannot see you failed miserably to deal with the tasks at hand. Or you claim you tried - the obfuscation and tangents has to be intentional.  

There's a track record here, Mark, and no, you don't get to "reset" the counter to 0 to start over with your "double or nothing". We get to remember the last 3 years, and all the other times you talked out of your ass, misused words, terms, definitions, refused to back up and learn what you're talking about, and admit to your errors.

Your tone is meaninless. Your failure is complete.

Except to prove why critical pedagogy must be eradicated with extreme prejudice from the education system, and why the educational system is doomed to actually educate ... Except by bad example.

outside arbiter (perferably one with a knowledge of economics) that has no bias towards me (or anyone for that matter) comes in for analysis and feedback, we will see more of the same. 

Oh, heh. You mean, another Cult (tm) Member?

I mean, that's what you'll say to whoever comes in - look at the vast number of new people who have ended up in the Cult (tm) after a week or so of trying to explain to you, or get you to factual basics?

"I think, though, that unless an outside arbiter (perferably one with a knowledge of economics) that has no bias towards me (or anyone for that matter) comes in for analysis and feedback, we will see more of the same. I've got this page linked and I'll keep checking back to see if someone leaves a comment that offers serious analysis as opposed to strident comments, personal insults, taunting and game playing. If that happens, I will comment."

Oh, that's too precious! I love the parting jibes as he rides off on his high horse!

Shall I fisk? Yes, yes I shall!

"I think" See, already off to a bad start. We have 3+ years of proof that you cannot think. "I feel" would be a more accurate phrase.

"that unless an outside arbiter (perferably one with a knowledge of economics) that has no bias towards me (or anyone for that matter) comes in for analysis and feedback" Wow! Why, it's the old school playground taunt of "Wait until I tell the teacher about you! Your gonna be soooory!"

"a comment that offers serious analysis" Again, your failure to understand what has been presented ISN'T OUR FAULT. DJ did all the hard work for you, just to get you prepped, and yet you still failed. We have no idea what "serious analysis" looks like to you. Methinks it's analysis that agrees with your prejudices. DJ, UJ, Ken, Kevin, et al., why their analysis isn't serious, it's more like an kegger! "Dude, check it out! CHARTS" "WOOOOHOOOOO! CHART! CHART! CHART!"

Is that the problem, you aren't being invited to the cool kids party?

"strident comments, personal insults, taunting and game playing." Was "strident" a word of the day? "Personal insults" Nah, we're just getting warmed up. Besides, some of us still remember you saying we're the same as Al Queda. Or calling us The Cult(tm). "Taunting" as in neen-neer neen-neer? Being stupid and being called on it isn't any of those things. You get what you deserve. I'm sure if I said something utterly inane no one here would think twice before pointing it out. Stridently. It's amazing just how thin skinned you really are, and how your comments consistently reflect your emotions uber alles world view. "Game playing" Again, logic isn't a game. In fact, the only games I see played are yours, and now that we won't play them, you've taken your ball and gone home.

"If that happens, I will comment." So does denying sex work for you at home? I only ask because that was an estrogen fueled statement. I've seen it before with other low ranking betas trying to control a situation well beyond their powers.

Yes, I am being harsh, and a bit offensive, I'll admit. But I take umbrage in your rudeness and whining. It's a personal insult to me for you to stomp over all rules of logic and decency and then demand to be treated with respect.

Teacher boy, you have beclowned yourself here for days.

Of course I'll explain it.

The nature of this thread is that you asked a question, I answered your question, you challenged me to prove my answer was correct, I proved my answer was correct, and I explained the underlying mechanism therein. I did these things over and over again, using very simple words and sentences.

Your responses to this can all be summarized as: 1) "Hey, look! A pony!"; 2) "I don't understand, so could you explain it some more?"; and, 3) "You're wrong! WRONG, I tell you! WRONG, WRONG, WRONG!"

I am not interested in ponies. I WILL NOT PLAY THAT GAME WITH YOU.

I'll bet you're not aware that your other two responses are mutually exclusive.

Those are two big words, teacher boy. Here's the definition:

mutually exclusive

adj.

unable to be both true at the same time

It is not a question of which of these two responses came first, because you have repeated both of these responses, many times, and in random order. Thus, you hold both of these responses to be true simultaneously, and that is not possible.

Of course I'll explain it.

It is quite simple. If you do not understand something, then you have no grounds whatever for saying it is incorrect. You cannot judge what you cannot understand. Conversely, if you state that something is incorrect, then you have no grounds whatever for complaining that it has not been explained sufficiently for you to understand it. If you judged it to be incorrect, then you must have understood it.

Now, just what is driving this behavior of yours? Is it your inability to understand what you are doing? Is it your inability to admit that something which you don't like is correct? Is it your narcissism and your fundamental dishonesty, both of which hammer you like a coolie driving a railroad spike?

One might think such a performance is worthy of a circus, but P. T. Barnum wouldn't. His famous saying was, "There's a sucker born every minute."

We are not suckers. You earn the treatment you receive here by treating us as if we were, when you know we are not.

It occurred to me after these last few comments that the goal of these discussions has now become "Fuck with Mark, drive him crazy, and he's always wrong no matter what" hence my comments on game playing.  Whether this is intentional or not it is ironic, considering this would be the exact same treatment Kevin complained of receiving at the Democratic Underground and that I have certainly seen played out there. No doubt, my past behavior plays a part in this treatment. As I have stated previously, I take responsibility for my part in it and apologize. Perhaps my change in tone is too late and there is too much water under the bridge. 

So, there's no "riding off," Russell...it's a choice. Admit that many of my points above have merit (which they clearly do) and recognize the common ground that we share (which I have done several times in this thread with very little to zero notice) and I will comment. Continue with the same theme and chances are very good that I won't comment. And, of course, there will always be my blog which will continue to delve into many of these issues with no more gross generalizatons and personal insults by yours truly. Juris has become a regular poster there (when he is not at Burning Man) and his comments have pushed me in a direction that have certainly made me much more reflective. I've actually turned Mastiff's EDU points from the other thread into a series which I have truly enjoyed. The choice here applies to there as well, however.

It's up to all of you.

It occurred to me after these last few comments that the goal of these discussions has now become "Fuck with Mark, drive him crazy, and he's always wrong no matter what" hence my comments on game playing.

There's no less than 3 words in that quote misused.

The goal has never been to "Fuck with Mark". Trust me. If that was the "goal", you'd be in far more trouble.

The goal, at least for me, is to counter you utter asininity and demonstrate the moral, intellectual, and factual vacuousness of your political positions.

And yes, I'm a "Primary Source" for my goal.

Whether this is intentional or not it is ironic, considering this would be the exact same treatment Kevin complained of receiving at the Democratic Underground and that I have certainly seen played out there.

That's incorrect.  Kevin was kickbanned for not being a "progressive", not for being wrong.  They kicked him rather than debate him.

You have absolutely no such claim, and to make that, after three years of the same is again, utterly asinine.

Perhaps my change in tone is too late and there is too much water under the bridge.   

The change in tone is fine - and you'll note that you immediately were received well with that.
What did not change is your methods, logical fallacies, and your inability to follow an argument, or evaluate evidence.  And as you more stridently insisted you could, as you demonstrated otherwise, we got equally strident back.  Possibly more so, because you were demonstrating that you did not understand, even as you insisted you did.  

Admit that many of my points above have merit (which they clearly do) and recognize the common ground that we share (which I have done several times in this thread with very little to zero notice) and I will comment.

Again, this is why the students cannot assess themselves.
Your "points" are meaningless, and were fisked mercilessly.  I pointed out that almost all of them were trite, showed no understanding of the example, and even now, this insistance proves you wrong.

Remember, we were talking about revenue and you jumped to dismissing that because of deficit. That's not a "valid point" - even if it might be if we were talking about another proposition.   

It's like me dismissing Greg Mankiw because of his haircut.  There is no "common ground" because you've demonstrated a total lack of knowledge - not enduring with you! - and you've misused words, concepts, and theories, and insisted that we MUST! RESPECT! YOU! YOU! LINKED! THUS! YOU'RE! VALID!

But you didn't link to valid things. You changed the subject, you threw topics out like a whacked piñata tosses candy, and then you insisted that somehow, you were right in all of that.

But you weren't, and you didn't make points, and if we've got common ground, I have yet to see it despite asking you point blank about it several times.  

You get the respect you earn, Mark.  You don't get it by trying to fake it, and yes, we know you're faking it.

And you could fix it - it's up to you.  Stop lecturing, and start listening. You might still disagree at the end. But at least it wouldn't be because of easily demonstrated fallacies in your argument.
As long as you continue to flaunt your inability to evaluate arguments, you'll be treated this way.  As soon as you stop, so will that treatment.

Oh, and admitting to some of your legions of errors wouldn't hurt. 

22. 15. You don't get to run away and start over, just cause you realize you've been proven wrong.

22. 15. One is more than the other.  Which one did you claim was more? Which one is?

"... Fuck with Mark, drive him crazy, and he's always wrong no matter what ..."

"... Fuck with everyone here, drive them crazy, and they're always wrong no matter what ..."

Teacher boy, that's what you DO. You have done so for almost three and a half years here, and done so in such a repetitive, scripted manner that twelve Standard Responses suffice to summarize the whole of it. Indeed, that sentence of yours I quoted above is, yet again, your Standard Response #9, the "Nuh-uh! Am not! You are!" response.

"No doubt, my past behavior plays a part in this treatment."

Yes, it does. You have dug the hole you are in so deep your ass is drowning in the Indian Ocean.

"As I have stated previously, I take responsibility for my part in it and apologize."

Good. Well done.

"Perhaps my change in tone is too late and there is too much water under the bridge."

Likely so. The change in tone is quite welcome, but we have seen no change whatever in your modus operandi.

Are you a poker player? I'm not. I draw three of a kind and I get a cat-with-a-canary grin that gives me away.

In fact, I'm not a gambler at all. I don't bluff.

A poker player wins by drawing good hands and by bluffing, i.e. by upping the bid even when he has a lousy hand, challenging the other players to meet his bid until the risk for them is too great and they fold. Bluffing can bite, really, really hard, if the other guy has a good hand and he thinks you're bluffing. The problem is that if you get called, and you're bluffing, and you have a lousy hand, then the other guy wins. Do that enough times and you will ALWAYS get called.

That is the position you are in here, and your dilemma is self-inflicted. You can't bluff, you try it continually, we all know it, and so you ALWAYS get called. Conversely, we don't bluff and we know our hands.

Don't scoff. The metaphor is spot-on.

You have too much of your self-esteem tied up in trying to bluff here, and you cannot withstand admitting it. The game would be over and your fragile, inflated ego would be shattered.

"It's up to all of you."

No, the solution to your dilemma is up to you, and you alone, and it's easy.

If you want to engage in discussions, then go elsewhere. Comment there under a different name. Stop the pretense of being infallible. Admit that the other guy is correct when the other guy is correct. Admit that you're wrong when you're wrong.

Years ago, and many times since then, I have told you that you might have something to write that is worth reading, but it is not worth wading through the manure you submerge it in to find out. That is still true. So, have done with manure.

In essence, admit that reality is what it is even when you don't like what it is, remembering always that reality doesn't care whether you like it or not.

You'll be amazed how easy it is, and you'll suffer no pain because no one there will know what you wrote here.

In short, stop playing poker. It ain't your game.

"occurred to me after these last few comments that the goal of these discussions has now become "Fuck with Mark, drive him crazy, and he's always wrong no matter what" hence my comments on game playing."

There has never been any reason to drive you crazy. As long as you make wrong statements, you will be wrong. Persisting in acting a certain way and expecting different results, well, that'll drive you crazy.

"Perhaps my change in tone is too late and there is too much water under the bridge." As UJ and DJ said, your changed tone is fine. But you are conflating tone with execution, and your execution has not changed.

"So, there's no "riding off," Russell...it's a choice." Gah!

This is what you said "I've got this page linked and I'll keep checking back to see if someone leaves a comment that offers serious analysis as opposed to strident comments, personal insults, taunting and game playing. If that happens, I will comment." If we play nice by what you are expecting, you'll comment. Otherwise, off you go on your high horse.

Guess what? I wasn't nice. I wasn't playing. And yet you still commented! Amazing! Almost as if you cannot resist, despite you telling us that you aren't going to comment. The only time you stop commenting is after your 'argument' has been blow clean out of the water and the monsters get close. Later you'll swoop into some other thread and lay down your blather, get pummeled and leave again. Rinse, repeat.

"Admit that many of my points above have merit (which they clearly do)"

Snort. Your, ah, "points" don't have bearing on the topic at hand. Since they don't apply to the topic, they have no merit within the thread. Plus, they've been beaten like a rented mule because they don't intersect with the topic. Notice the theme? Off topic points have no merit to the topic and will be treated as such.

"and recognize the common ground that we share (which I have done several times in this thread with very little to zero notice) and I will comment." So again, ply by your rules and you'll deign to comment again? Golly gee, I'll have to pass.

"And, of course, there will always be my blog which will continue to delve into many of these issues with no more gross generalizatons and personal insults by yours truly." Right, back to your pure as driven snow blog, because you haven't called us The Cult or anything over there.

"It's up to all of you." Stop with the persecution complex. The choice has always been in your court, and you keep choosing poorly.

So toddle on off now. Or come back whining again. Or even, I know this is radical, change your methods here. It's up to you.

Just... cannot... resist... 

> So, there's no "riding off," Russell...it's a choice.

Mark, the concepts of "riding off" and "choice" are not mutually exclusive.  In point of fact, the former can, and in this case does, describe the latter - and I dare say it is a rather apt description. 

This is part of the problem you are having with commenting, right here.  You say, "No, you are wrong," and then you either say something completely and totally irrelevant to the discussion at hand (for example, whinging on about deficits when we were clearly discussing revenues), or obviously show that you honestly have no idea what the people here are talking about (see above). 

Now, not having a clue, in and of itself, is not a problem - most of us start out that way, and most of us end that way as well.  The problem, and it is a problem you have displayed in almost every single comment you have left here in the past three years, is that you do not recognize that you do not have a clue, and are militantly opposed to even admitting that it is a possibility. 

For example: 

 > Admit that many of my points above have merit (which they clearly do)...

Proof by vigorous assertion is not proof.  What if, and I am speaking purely hypothetically here, your points actually did not have merit?  Would you be able to recognize it?  Would you be able to see the criticisms of those points as valid (whatever that word means to you - you still never answered that question)?  Would you be able to formulate some kind of response that did not consist of simply repeating those points over and over and over again? 

This comment thread, in and of itself, have proven the answers to all of those questions (except the first) to be, "No," and I dare say the vast majority of the comment threads in which you have engaged over the past three years do the same. 

To be perfectly honest, you are doing exactly that which you are accusing us of:  they're always wrong no matter what.  We show you specific numbers, we play it all out, we give you the primariest of primary sources, we spell out exactly what steps we are taking and what they result in... and you throw it out the window, simply because it is us saying it.  No matter what. 

Again, ignorance is not a problem, in and of itself, and so long as the ignorant person in question is willing to admit his or her ignorance, and grow from it, there will be no problem.  But when the ignorant stridently defend their ignorance, as you have done through the course of this entire comment thread, there is a problem, a significant one, and it is not incumbent upon us to correct it. 

Oh, and regarding your petty, school-yard style threats...  they only work if people care to have you back/around.  Just so you know. 

Wow, four posts in a row echoing the same points!  See? Groupthink!  It's so obvious! ;)

In the interests of fairness to Marxy, and I hate to do it because as a teacher one of his primary skills should be the ability to communicate ideas effectively, perhaps what he was trying to or at least should have asked was this:

I understand that Bush cut tax rates and following that, tax revenues increased. If the tax rate was not reduced what would have been the effect on revenues? Would revenues have still increased if the tax rate had not been cut? If so, would that increase in revenues have been more than, equal to or less than the increase in revenues realized after the tax rate cut?

In other words, did the economic stimulus provided by the tax cut produce enough economic growth to compensate, in terms of revenue, for a lower level of economic growth taxed at a higher rate?

don't believe what the gubmint tells you about how many jobs were "created or saved" by the stimulus

When President Obama says that the stimulus created 2 million jobs, it's not completely true. In fact, he is being generous and using projections through 2010. I tend to think that that numbers from Moody's, Global Insight, and Macroecomics Advisors (all between 1 and 1.6 milion jobs created or saved) are likely more accurate than recovery.gov.Now, Moody's and Global do project a higher number of 2.5 million jobs will be saved but who can really say that?

So, honestly, you're right...it is a nebulous concept. Claiming victory or defeat for political purposes is sure to happen in the next three months but there's nothing completely accurate about either view.

“GuardDuck, if you re-read my remarks, I did ask similar and summative questions and comment in the same fashion.”

I don't need to re-read your remarks. I speak jive markadelphian and had to translate from the multiple posts containing extraneous information in order to provide a concise question. There is nothing the same fashion about the way you asked that question, you complicated it every time you tried. Wasn't someone just posting about you not being able to simplify?

You should be able to communicate your idea's effectively, but you can't(1). You should be able to understand simple communications that you read, but you can't(2). You can, however, recognize your own ideas when communicated by someone else(3).

Which is why (1)I had to rephrase your questions. (2) You didn't understand that when I said “perhaps what he was trying to...ask(ed)” means I already read your prior posts. And (3)why you came back here and railed at me to re-read your posts. By the way, your welcome.

And that is why I knew I shouldn't have done this, and am kicking myself for doing it. I know that you know what you are trying to say, but you're not saying it right. What's more, you don't know that you're not saying it effectively. So rather than saying “Thank you GuardDuck, that's what I was trying to say. What's your answer DJ?”, instead you tell me “re-read my stuff man, I already said that.”

"take a look at the photo that I have included. The stimulus was passed in the first quarter of 2009 when we had just come out of a fourth quarter 08 at -6 percent . Look at the 4th quarter of 09...over + 4 percent. Second quarter 2010 is 1.6 percent."

Apropos of nothing, but just how that graph serves to distort the numbers to those to don't understand what it's talking about.....

But you do know that a (hypothetical) 10% increase following on something that just had a 10% decrease does not mean that you are back where you started?

Re: Guard Duck.

And we're back to personal insults...ah well.

And we're back to personal insults...ah well.

Of course, none of that is a result of anything you did, or didn't do. No, sir, Nope.  

22.
15.

Forget that?

Oh, right. Well, failing to answer that, or admit that it impacts your authority and honesty, is what I consider to be a personal insult.  Which you have no problem delivering

 Either with that specific example, or - how many more do you need me to detail (again?)

As usual, your hypocrisy exceeds your irony.

The attention given to GDP in this thread calls for a look at just what GDP represents. It is not uncommon for people to refer to GDP when referring to the health and/or strength of a nation's economy (to be sure, there are other ways), so we ought to take a look at it.

Here's the definition Mankiw (2008, p. 510, 512) uses:

Gross domestic product (GDP) is the market value of all final goods and services produced within a country in a given period of time.

The commonly used formula (also reproduced in Mankiw, p. 512) is:

Y = C + I + G + NX, where

Y = GDP
C = consumption
I = investment
G = government purchases
NX = net exports

Mankiw's example for G is "...when the Navy purchases a submarine...", which is fine as far as it goes. But think for a minute: Deficits for the last two fiscal years are 9.9% and 9.1% of GDP respectively. That means that almost 10% of the measure of the health of the economy is made up of borrowing beyond revenue (or of printing money into existence, but leave that aside for the moment).

Were that spending to be withdrawn from the economy, period-over-period change in GDP would approach or exceed (I believe an 11.5% GDP contraction was noted somewhere above, but I'm dipped if I can find it -- thanks, Echo!) the common definition of depression.

But how different is what the State is doing from a household (or any entity engaging in economic exchange) using credit to buy what it cannot by with its current revenue? If I go get five more credit cards and increase my consumption by $20,000, am I -- depite the increase in my "personal domestic product" -- truly more prosperous?

The State can play tricks unavailable to the individual. For example, the central bank can hide the apparent cost by suppressing the cost of credit...for a while. But just as I will eventually stop getting 0% introductory interest credit card offers once lenders figure out what I'm up to, the cost of borrowing for the State will rise (because bond buyers will demand higher rates of return -- higher interest -- to account for what appears to be increased default risk based on a higher debt load -- current income and indebtedness being, I trust, uncontroversial as a measure of creditworthiness for a prospective lender). The central bank either must seek higher interest rates in order to meet lender demand, or failing to do so, print the difference into existence. Potential consequences run from stagflation to hyperinflation, but I hope it is axiomatic to everyone here that more money chasing the same amount of goods and services is inflationary.

So by GDP alone, assuming one accepts the argument for GDP as a criterion variable for the health/strength of the economy, if we jacked the deficit to 20% of GDP, the economy would be even healthier, wouldn't it? Why stop at 20%? Why not 200%? We'd all be rich -- RICH, I tell you, beyond our wildest dreams! Ahahahahahaha! Whee! This economics stuff easy! [/mogamboguru]


It's also a nonpartisan issue to anyone who's paying attention. For there is none righteous: no, not one. I always say that if Reagan was so fired up about balancing the budget, he should oughta have submitted one somewhere along the line, and really laid it out for the American people to see. He kicked the can down the road too: Hayek called it, at the time.

Mark (and anyone else who'd benefit from the advice): Don't take my word for any of this. Go read some contemporary posts and some of the archives of a man named Karl Denninger at market-ticker.org. It can be reached from other URLs too, but that's the one I use.

I don't agree with Denninger in a number of areas, because he's more populist than Austrian and his solutions rest too much for my taste on the State being made up of righteous men, but if you want some fairly straight dope from someone who doesn't bash Obamanomics from a partisan perspective (if anything, I'd say he's even more down on Bush, and I'm not sure I can argue with him), he's your guy.

For a somewhat more Austrian-influenced view, I recommend Mish Shedlock (Mish's Global Economic Trend Analysis ).

For the more or less straight anarcho-capitalist line, there's mises.org. For Keynesianism, I suppose Krugman and maybe Robert Reich.

If you accept the premises of Keynesian economics and are unconcerned with perpetual deficit spending, that is of course your prerogative. The evidence of history is strongly against Keynesianism, though.

 It also has a "Oh, and by the way, Mark, you're stupid..."

Which is more, 22 or 15?  Either way, the fact you won't admit to your errors marks you.

But no, it  didn't have that - except to you, because you're more skilled at looking for reasons to be a victim, and be excused from the work, than to do the work, and evaluate what was said.
 
This doesn't even get into the notion that if I had asked his question, the response would've been exactly the same as the ones above...since I asked it.

Unlikely. Possibly. 

But we have three years of precedent to work from. Three years of blatant, flagrant errors without correction. Three years of presuming oneself as an expert, despite the errors and inability to admit to them and the inability to discuss or define core principles.  Three years, Mark.

Three years of "Verbatim" being misused - and proudly so. Three years of words being redefined, goalposts moving everywhere, new rules being added just after points were scored after you, three years of victimology and rude, arrogant behavior. Logical fallacies. Insults. Graphic and massive failures of logic.

DJ told you what you needed to do if you really want to turn over a new leaf. I won't be so exiling. If you can change, you'd be accepted for it here.  But you're unwilling to face exactly what a burden you face in order to establish positive credibility.

Because I can literally take up at least 3 Echo comments of 5000 characters with SUMMATIONS of arguments you've lost, run away from, or refused to admit blatant error in the last three years.

Yes, there is a seperate "treatment" for Mark's comments.

Because you've earned it in three years of efforts.

Now, THIS is funny as hell:

http://thehill.com/blogs/on-the-money/domestic-taxes/116251-dems-cant-agree-over-killing-or-saving-the-bush-tax-cuts

The goober:

"“All of the energy in this election is on the right; the progressives are completely demoralized,” Begala said. “One of the reasons is that when you get up in the morning and you find out that Democrats are increasing troops in Afghanistan and cutting taxes for the rich, why the hell have a Democratic Party?”"

I damned nearly fell out of my chair. Remember who Paul Begala is?

"... Democratic strategist and former advisor to President Clinton..."

Then we find this:

"The nonpartisan Congressional Budget Office predicts continuing the all measures will add nearly $4 trillion to the debt in ten years. Tax breaks for the wealthy would account for less than a quarter of that figure, or $700 billion.

"Lawmakers are currently talking about a one-year extension of all Bush tax cuts, which would add approximately $200 billion to the debt in 2011. Tax breaks for the wealthy would account for roughly $40 billion of that increase."

Contrast that with the first commenter's comment:

"Let's tax all of the "rich" people to help pay for everyone else even though they are already paying taxes at a higher rate. That will really help the job rate, because we all know that when you tax business owners more the first thing they do is go out and hire more people."

Alright, I've got something to say which I'm sure will spark a whole slew of comments but for me it will more than likely mean the end of the over analysis (how something was said, what someone really meant etc) of the comments in this thread. This will be near certain, of course, if my challenge at the conclusion is ignored. And, honestly, I'd much rather focus on Ken's comments above as well the latest one that DJ put up as they contain some very interesting topics and offer no personal insults.

I scanned back through the comments in this thread and discovered, quite clearly, how and why the discourse on here went...ahem...the way it did.

It started with what I would imagine was surprise by DJ and a few others that I accepted his challenge. Worse, I knew more than I suspect that he (and others) thought I did. The more facts and sound arguments I presented, the more personal insults were heaped upon me. Obviously, I don't think this was a coincidence. As I brought up more points to add to my argument...points that were well researched and sound....we saw an increase in taunting and game playing of a semantical nature.

But my worst transgression was agreeing with you and illustrating why I did with evidence. This resulted in the insults, taunting, and game playing going nuclear.  This is probably going to be the hardest part for many of you because I will be agreeing with you more often and thinking critically about what you have to say. In the past, I fell into the anger and rage trap too many times myself and it proved fruitless...hence the reason why I am taking a new approach.

So, here is my challenge for DJ, Unix, Russell, Ed, Guard Duck and anyone else. It would be great to see responses from all of you. Demonstrate critical thinking regarding the topic of supply side economics and the Laffer curve. Bonus challenge: find three economists and share DJ's statement and subsequent evidence with them. Honestly report their findings. Now, if you choose to pass on the challenges, I think it would be a drag considering I took DJ's.

Oh, and if you choose to go back to the personal insults, game playing and taunting (which I'm thinking is a strong possibility given my thoughts shared above), I will save what I know is your valuable time.


They're completely honest, you're completely lost. 

you are in error and have no enduring knowledge.


I mean, we joke about Mark having aphasia, but, goddamn, the humor is leeching away as we speak.


It's like trying to push a cow. It doesn't work, and the cow has no idea what you're doing.


But it is WAY over your head, teacher boy


You've yet to ever, once, demonstrate critical thinking skills, you're not a competent judge. You might as well send me to the Westminister Dog Show as to judge true critical thinking skills. 


The purpose of my previous comments was to education your miserable thick skull before asking that question such that you would understand that. 


but it cannot even begin until you stop behaving like a childish little shithead?

you ignorant little halfwit.

The more facts and sound arguments I presented, the more personal insults were heaped upon me.

No, the more you ignored factual rebuttals and attempts to keep you on topic, the more we made comments, allusions, and allegory.

The personal insults were the result of you not only not understanding the premise, but actively refusing to research basic facts.  Oh,sure, you posted a lot of links (off topic), and you made lots of claims (having nothing to do with the proposition.  (And when you correctly interpreted something, DJ gave you credit for it.).


As I brought up more points to add to my argument.

You've changed the subject again. 

Let's go back if you want to summarize.

DJ offered you a simple proposition. You accepted. He defined it. You started talking about things having nothing t do with the proposition, you linked to things that were related, but with multiple variables to be accounted for, and not directly dealing with the proposition agreed upon.

That is, based on that proposition, then those other issues might come next, but you had yet to deal with the initial proposition.

And despite everybody telling you the exact. same. thing. you then insisted we were all wrong, cause you said so, and we hadn't dealt with your tangents.

Well, I did.  Furthermore, based on Mankiw's haircut, I proved that he's actually a transsexual first baseman for a minor league team in the Cubs heirarchy. *

And while you're trying to assign us work - that you couldn't judge - bloody hell, Mark, you couldn't manage to deal with a SIMPLE PROPOSITION - and you want to deal with the Laffer Curve?  Well, you don't. You just want to obfucate things into a complex enough mishmash that you can declare victory. Or at least not be obviously wrong.

22. 15. WHICH IS MORE?  ANSWER THE DAMN QUESTION.  Gee, why won't you do that?

* - Ok, no I didn't, but if you get to make shit up, so should we.

Actually, to answer my own question:

The reason you won't answer 22 versus 15, is because that's STEP ONE IN A LOGICAL PROCESS.

And even you know it. So you resist it, because if you WANT IT TO BE OTHER THAN REALITY, that's all it takes.

Step one.  Based on that answer, that determines the next step "Who was correct". Further down is "Who's usually correct" - but you know that Step One does not in any way go your way.

So you ignore it, and demand that we dance for you.

Only when you clear out your dance card - there's plenty in waiting for you.

The more facts and sound arguments I presented, the more personal insults were heaped upon me.

Speaking personally, that is pretty much yet another lie.  I cannot comment on the motivations of other people personally attacking you, or whatever it is you are whinging about now, but I did not resort to pointing and laughing until such time as it became abundantly clear that not only did you not understand the words that were being used in the conversation (to wit: revenue and deficit), but also that you had absolutely no desire to learn the proper definitions and uses of the words, and were militantly defending that ignorance at every available opportunity. 

The only one playing games, here, Mark, is you - you are constantly obfuscating, tangentializing (new word!), and playing the wounded martyr, when the only people here with knives are you.  I would strongly suggest that you stop stabbing yourself in the back, but, hell, you seem to enjoy it. 

And since you are so fixated on unanswered challenges now (which gives you the chance to ignore and minimalize the fact that your arguments before in this thread have been systematically addressed and rejected already), how about one of mine that you have still left unanswered:  please point out, anywhere in the history of Kevin's weblog, wherein he or commenters of his general political bent have factually misrepresented the words or intentions, as they are historically known, of the Founding Fathers. 

Demands tend to follow a FIFO stack, so lead by example, mate. 

So, here is my challenge for DJ, Unix, Russell, Ed, Guard Duck and anyone else. It would be great to see responses from all of you. Demonstrate critical thinking regarding the topic of supply side economics and the Laffer curve. Bonus challenge: find three economists and share DJ's statement and subsequent evidence with them. Honestly report their findings. Now, if you choose to pass on the challenges, I think it would be a drag considering I took DJ's. 

Ahh, how cute!

I'm going to repeat myself just cause that's what we have to do for you.

"I'd like to hear from you that you understood DJ's valid argument and have DJ confirm you do  understand his argument. I guess we can't always get what we want. Life's tough."

What you still don't get is that you didn't take DJ's challenge. You think you did, but you failed.

I think we could reduce the thread count by at least 35% if we didn't need to reiterate the same points over and over again. I take my job at the Redundant Department of Redundancy seriously, but I rather not take my work home with me.

And again, just to repeat a common theme around this parts, the odds of you, Markadelphia, understanding any sort of researched response would be close to nil since you still haven't figured out DJ's argument in this very thread!

But all means, keep whining. It's amusing on so many levels!

So, it's more insults, taunting, and game playing. I have noted that DJ, Russell, Linoge, and Unix have all refused to demonstrate critical thinking regarding supply side economics and the Laffer curve. As a post script to all of this, check out Sack's cartooon called Anchor Baby...

http://www.startribune.com/galleries/99985859.html?elr=KArks:DCiU1PciUiD3aPc:_Yyc:aUU

It's the second slide from the left.

Now, it will be on to Ken's comment. Ken, I'd like to thank you again for a stunning and well thought out post. It was also very funny and I'm not certain any comments I will offer will do it justice. I'm going try, though.

So, it's more insults, taunting, and game playing. I have noted that DJ, Russell, Linoge, and Unix have all refused to demonstrate critical thinking regarding supply side economics and the Laffer curve.

Why should we?  You challenged DJ, he took on your challenge, you didn't understand any of the words he used (which were small ones) and then you declared that he hadn't met your requirements!

But more importantly:  (said like Cary Elwes in Robin Hood: Men in Tights) Unlike other people here talking about the Laffer Curve, I've not flagrantly misrepresented it as a measurement.

IOW: I know more about it than you do.

How in the hell do you hope to assess my knowledge, when it exceeds your own?

From my point of view, all the discussion of GDP, Laffer curve, multipliers, indifference curves, and the like serve to obscure and mystify the lay observer with respect to what economics really is. The basic principles of economics can be apprehended without recourse to abstruse math (but the math can be helpful for some things).

Economics (and I learned this from, of all places, listening to radio evangelist R.C. Sproul: long story, details not numerous but nonetheless dull) comes from the Greek oikos (home) and nomos (rule or law; some sources render it nomia - management). So economics means home rule, or household management.

I mentioned mises.org previously (The Mises Institute gets its operating budget from private sources, . Here's a post on the Mises blog by Art Carden that pretty well sums up the basics that flow from the etymology I presented (as always, don't believe a word I say). Summarizing:

1. People act.
2. Every action has a cost.
3. People respond to incentives.
4. People make decisions at the margin (they make trade-offs).
5. Trades make people better off. (Tooting the horn of my own discipline, the late great Wroe Alderson (1957, 1965) defined marketing as -- paraphrased -- exchange of items in the assortments held by A and B such that the value of A and B's assortments after the exchange are both greater than they were before.)
6. People are rational (might be better to say they do things they expect to provide them with net benefits). Carden's elaboration of this point is a must read; "people are rational" does not equal "people are Spock." I add on my own hook that some utilities are intangible and known clearly only to the beholder.
7. Using markets is costly, but using government can be costlier still. This gets into transaction costs, an interesting subject in business (where it is germane to the "make or buy" decision) as well as in economics. I will write a post at my own blog (real soon now) about the way State action distorts transaction costs in business.
8. Profits tell businesses they are helping others, while losses tell businesses they are wasting resources.
9. We shouldn't ignore the long-term and unintended consequences of policies and actions. If you've ever heard the term "broken-window fallacy" (see Bastiat and Henry Hazlitt), this is the point they're trying to make. It differs from the precautionary principle (waggishly summarized as "never do anything for the first time") by actually attempting to trace out the consequences of an action to everyone, not just particular groups. Again, Carden's explanation is better than mine.

Carden's elaboration of this point is a must read; "people are rational" does not equal "people are Spock."

I would disagree a bit with Carden.  Individuals are rational.  People in groups may not be.  I'm curious how Carden saw the Dutch tulip mania.  I'm reminded, every time I think about that event, of the Garry Larson Far Side cartoon where one cow raises its head and says "Grass!  We've been eating GRASS!"  Somewhere, someone in the Netherlands said, "Flowers!  We're buying freaking FLOWERS!!"

  I'm curious how Carden saw the Dutch tulip mania.  

If it really happened.  The reading I've done had a dearth of sources and evidence that it was widespread or even more than a handful of people. 

Oh, wait, sorry. I'm not supposed to know anything about econ. Sorry, NM.

This will seem off topic, but it is relevant to this thread, although not to the post this thread is supposed to be commenting on.  This is relevant to the Markadelphia issue.

About 10 years ago I read of a study about competence that had been performed.

The study's author used spelling tests as his vehicle.  He gave volunteers spelling tests, and then asked the test subjects how well they thought they had done.  People who actually had done very well tended to slightly underestimate how well they had done.  People who had done very poorly tended to greatly overestimate how well they had done.  He then asked the test subjects for help grading other test subject's tests (they weren't ACTUALLY doing so, but they were told they were).  After being exposed to the correct answers in this manner, he again asked the test subjects to evaluate how well they thought they themselves had done.  People who actually did well lowered their estimates slightly, those who did poorly raised theirs.  There was a correlation between how poorly one actually did and how much better than they actually did they estimated they had done (That's poorly worded, so I'll elaborate: if you think of the difference between a test subject's actual score and estimated score as "bonus points", the lower the actual score the more "bonus points" the test subject gave themselves).

The study author's conclusion: the less competent a person is, the more competent they tend to THINK they are.  The study's author reasoned that this was because the skills needed to BE competent were the same skills needed to ASSESS competence.  Being incompetent therefore not only robs someone of the ability to perform well, it robs them of the ability to accurately assess their own performance and the performance of others.

So you'll never get through to Markadelphia until he's actually competent; at which point, you won't need to get through to him.

Perhaps this will save you all some time (although I do enjoy the spankings you all keep giving him, at least until the repetition gets boring).

Great, Ken. Now I have another thougtful, sound, and reasoned comment to reflect upon...there's no way I can do them both justice. :-E

Don't agree with me, show me facts which prove me to be in error and you are incompetent and an imbecile.   

You're the one who claimed 15 was more than 22. What more must I do?

Who claimed the Laffer Curve was a measurement?

Who started talking about deficit when they'd agreed to talk about revenue?


Now, watch what happens as a result of this comment

The same thing that has been happening for the last 3 years.

Who is "Mankiw's team?"

Mark: though I know this will be a waste of time, just in the hopes that someday you'll learn something, allow me to lecture you. Yes. I'm going to lecture you. Sit and take notes, and stop interrupting and you might learn something.

If you don't, it's not my fault. I tried. But the student must be willing to learn.  You're not. Yet. Maybe you will be sometime.

What can I say, I'm an eternal optimist.

First.  The discussion was about revenue.  Soley revenue.  Yes, you cited Mankiw. But you didn't ask me why I said "yes" to your question "Do you agree or disagree with him?"

Because you won't understand.  You don't understand the basics, so you can't understand the complex issues.  But what I meant by that is yes, Mankiw is a bright guy, and yes, he's mostly correct in his decription.  That doesn't mean you understand what he said. Or what he wanted you to understand. It means that yes, given the proposition he's proposed, he's correct. And that's something very important you cannot grasp. You cannot define propositions, nor stay inside of them.  But he can. He's a bright guy.  You don't notice when people change contexts on you - and you refuse to stay inside contexts, jumping out of them to avoid having to admit that yes, you're wrong.

Yes, per capita, revenue dropped.  Wait. Why did he add per-capita?  The first problem with that is that it adds a whole new variable - with arguable definitions and constraints - how do you adjust for per-capita? (There are number of ways for it). The second is that now you've complicated matters. The third is, does it make sense to? So there are a bunch of new people under 2 years of age. Does that matter for the sake of income tax averaging? Does it make sense?  Does it cause less taxes to be taken because of additional deductions? Hey, these things are complicated. You do it without understanding why, I'm pretty sure Mankiw had a plan in his mind for bringing that up.  But, yes, he's correct.  Per capita, the revenue dropped.

But what happens when we drop the "per capita" qualifier?  We find that revenue increased. (The adjustment for monetary value is more straightforward.)

Now, you don't know what the Laffer Curve is.  it's not a "measurement" (nor have you admitted to your error there, despite 15 seconds of Googling could demonstrate that even for you.)  It's not even by a guy named Laffer. 

It's an idea. A projection. A description of human behavior.  The Laffer Curve, as it's taught in the general, does not have any specific values on the X and Y axis.  Historically, you can assign them, as you look back.  But the concept of the Laffer Curve is not, as you misunderstand it, to merely decrease taxes.  It's that at the apex of the curve - or technically, the highest apex, because a real Laffer Curve can have more than one - has the maximum revenue. Increase taxes above that, and your revenue decreases. Decrease it below the apex, and they decrease.

This also presumes that maximizing government revenues is the best use of the money. I disagree with that concept, wholeheartedly , but that's another subject entirely. The Laffer Curve has been demonstrated historically numerous - times. You can look at New Jersey and Maryland right now, in the last 2 years to see it's import. They raised tax rates, and their revenue plummeted.

This means - as DJ explained to you and you didn't understand - that an increase in tax rates can cause revenues to go up.  IF YOU'RE ON THE LEFT SIDE OF THE CURVE. If you're on the right, you cannot raise revenue by raising rates.  

I kept asking you to tell me what you needed to know to use CBO data. You didn't, because you didn't know. So take notes. the CBO data is only useful if you know what the assumptions they were instructed to use. They can hint at them, but the CBO does the math based on givens and assumptions.  So when, for instance, Pelosi and Reid tell them to run the numbers for Obamacare, and to presume that 500 billion in Medicaid costs goes away and that they're still paying that 500 billion (that just theoretically went away) to doctors, and that the 500 billion will go to the general operating fund (which is going away, and also being paid to the doctors) they do that math with those assumptions.

(pt 2)

Without knowing the givens, you cannot blindly trust CBO numbers. But you should never blindly trust ANY NUMBERS. Learn to do the math yourself. Otherwise you're at the mercy of people who slide "per-capita" in and and out, or other rhetorical tricks.  If you know how to do the math, you can distill it down to the base parts.  Then, and only then, will you understand things.

The CBO report you quoted presumed a 10 percent flat reduction.  But that wasn't what the "Bush tax cuts were". It presumed that there would be bad effects - the CBO was told those assumptions to make things look worse.  

But even so, the difference is that you quoted them, in an argument, when we had real historical data to look at. Why would you cite a study, presumably to study future effects, when we can look at the real effects of the real law?  That makes no sense at all.

We don't have a flat rate tax system, we have a tax system that is utterly incomprehensible to any one mortal person.  That includes the people now running it, none of whom have done their own taxes in accordance with it.  

All of these things serve to distort the concept of the Laffer Curve in the specific.  But  many times, they're quite literally inconsequential noise to the overall, and you can presume them to be 0 for all real purposes.  And we can see that in many cases. You can look at the specifics of NJ and Maryland, and NYC, all of whom are now facing massive budget shortfalls because they raised their tax rates.  But they also complicate and obfuscate if you don' t understand the core principles. After you understand the core, then you can worry about the niggling details.

The Laffer Curve can be generated out of past data fairly easily. Any future projections are exactly that. Projections. But projections have to understand past history.

And that's where you fail, because you see into history what you wished to have happened, not what actually happened.

Now, question time for you. (Other than which is more, 15 or 22?)

What is your total tax burden right now?  Approximate if necessary. Would you work twice as much to earn half as much again as you do now?  (Would you work, for instance, 80 hours a week, to make whatever your salary is now times 1.5?  (so if you made 100/week , you'd be making 150/week.)

Troll boy, you really, really need to learn how to look things up for yourself.

I'll make it easy for you.

Google "Arthur Laffer" and click on the first link that pops up.

Now, do you see how easy that was?

I'll put the link here because I doubt you'll go to that much effort. It is:

http://en.wikipedia.org/wiki/Arthur_Laffer

Now, here are the choice excerpts therefrom:

"Arthur Betz Laffer ... is an American economist who became influential during the Reagan administration as a member of Reagan's Economic Policy Advisory Board (1981–1989). Laffer is best known for the Laffer curve, an illustration of tax elasticity which asserts that, in certain situations, a decrease in tax rates could result in an increase in tax revenues."

That's "in certain situations".  Now, let's cut to the chase, shall we?

"Although he does not claim to have invented the Laffer curve concept (Laffer, 2004), it was popularized with policy-makers following an afternoon meeting with Nixon/Ford Administration officials Dick Cheney and Donald Rumsfeld in 1974 in which he reportedly sketched the curve on a napkin to illustrate his argument. The term "Laffer curve" was coined by Jude Wanniski, who was also present. The basic concept was not new; Laffer himself says he learned it from Ibn Khaldun and John Maynard Keynes."

WHAT? Laffer learned the concept from Keynes?

And he explained it to Cheney and Rumsfeld in 1974?

Is your head exploding yet?

Now for the meat of it:

"A simplified view of the theory is that tax revenues would be zero if tax rates were either 0% or 100%, and somewhere in between 0% and 100% is a tax rate which maximizes total revenue. Laffer's postulate was that the tax rate that maximizes revenue was at a much lower level than previously believed: so low that current tax rates were above the level where revenue is maximized."

How do you tell if the current tax rate is higher than the tax rate that would maximize revenue? Why, you lower the tax rate and see what happens. If it was higher, then the lower tax rates would result in increased revenue.

The Bush tax rate cuts did that. Revenue increased.

Arthur Laffer knew what he was talking about.

Again, do you see how easy that was?

200!!!!!!!!!!!!!

He agrees, as do I, that if Laffer's theory is applied on a smaller scale or in countries with higher taxes it is not without merit. I would also agree that it applies to coporate taxes and revenue as shown in the AEI study.

There's a possibility, faint as it might be, that you read neither DJ nor my explaination on what the "Laffer Curve" was before you wrote that.

In the spirit of your reboot, after reading what we explained to you, you should be willing, Mark, to apologize and correct that.

I suspect you won't know why you should, even after it was explained in graphic detail.

Here is another interesting tidbit:

http://www.foxnews.com/on-air/on-the-record/transcript/hatch039s-plan-get-parts-health-care-law-repealed-gains-steam

Here's the lede:

"GRETA VAN SUSTEREN, FOX NEWS HOST: Senator, nice to see you, sir.

SEN. ORRIN HATCH, R-UTAH: Nice to talk to you, Greta. How are you?

"VAN SUSTEREN: I'm very well. So Senator, you have -- you've introduced a bill, the American Job Protection Act, and I understand now you have secured some support, the United States Chamber of Commerce, National Federation of Independent Business and the National Association of Wholesalers and the National Retail Federation. What is this statute that they are now endorsing?

"HATCH: Well, what that does is it does way with the employer mandate. As you know, they're going to impose mandates in health care on employers that are going to be -- cost an arm and a leg. And the employers are now starting to rebel about it because they're -- these are going to amount to at least a $52 billion increase in taxes, plus all kinds of other onerous regulations and burdens. So that's why people aren't hiring today, in a great sense, because they -- they basically just don't know what's going to happen in the future. They're very uncertain. They're very upset about it. And to be honest with you, that employer mandate has been changing as we sit here.

"VAN SUSTEREN: What do you mean it's changing?

"HATCH: Well, it was supposed to be just a mandate that you had to give insurance to your employees. It was supposed to save money over the long run. Now we find it's well over $300 billion in additional costs. Plus there'll be about a $52 billion increase in taxation. Plus, there are a lot of businesses that do have insurance, but they're now being told the insurance that they have isn't as good as it should be, or it isn't the way the government wants it to be.

"Small businesses are just frantic about this because a lot of small businesses are refusing to hire over the 50-employee limit because they get pushed into having to have this employer mandate, which is -- which can be very expensive and very problematic for the businesses involved."

Now, recall an excerpt from a previous comment of mine:

"The guy who manages my investment portfolio confirmed it to me, and he used the same words. He told me that many trillions of dollars were pulled from the market as the Obamateur administration ramped up its agenda, and they will remain uninvested until, quite literally, "They know what the new rules are," meaning the new conditions under which those investments will be made. Congress and the Obamateur administration are killing the incentive to invest and expand, and those with money to invest and expand are behaving accordingly."

Golly. Who knew that the gubmint could affect the willingness of people to invest and of business owners to expand?

I wonder if Echo will break soon.

Unix, you are correct. I did not see those comments. I wonder why Echo shows me things some times and not others. And then I will see something once and then it will be gone and then it will be back again...ah well...it's probably user error.  
 
But now I do see them...Unix first  
 
I'll skip the "you don't understand" stuff if that's ok...  
 
We find that revenue increased.  
 
No doubt that it did but I think it was for different reasons. Nonetehless, good analysis of Mankiw.  
 
Skipping the word games bit (measurement, Laffer)  

I do agree that it does work in a mirco fashion, if you will, in either smaller subsets or in certain economies that have insanely high taxes. The reason why Reagan wanted to use it was because he lived it. He would only make four pictures a year and then "go off into the country" so he wouldn't have to pay higher taxes...which at the time was 90 percent! So, in that environment it has been shown to work. You get taxed higher, you don't want to work. But our tax rates right now are very low compared to that time as well as many other countries.  
 
you cannot blindly trust CBO numbers.  
 
Agreed. That's why I used other sources. And I do understand that they use estimates. Remember, though, that the CBO is a source for estimating other things that you may agree with, no? In addition, I wanted to look at real historical data comparing other business cycles to the 2001-2007 cycle but we didn't do that.  
 
 
What is your total tax burden right now?  Approximate if necessary. Would you work twice as much to earn half as much again as you do now?  (Would you work, for instance, 80 hours a week, to make whatever your salary is now times 1.5?  (so if you made 100/week , you'd be making 150/week.)   
 
My wife file jointly and tends up being around 30 percent (incl. state and local) of our income. Your work question is a tough one for me because I don't work to make money. It's hard for me to look at things in the framework of your question. I work because I enjoy what I do, have seemingly endless energy for it, and don't think much about the money I make. My wife makes 3 times as much as I do so we are doing pretty well. I don't worry about it but to directly answer your question...I would work 80 hours a week...doing my job...and how much more I would make would be irrelevant. I know...I'm weird...but I love what I do.

DJ's comment,  
 
That's "in certain situations".  
 
I agree. And those situations would be corporate taxes (AEI study, MAYBE US), countries with high tax rates (probably), and possibly a subset of income earners that make more money. But that assumes a higher tax rate. I think you will agree that we do have lower tax rates for upper income earners compared to previous years.  
 
Again, do you see how easy that was?  
 
It's easy if you put the qualifier of "certain situations" on it. But that's not what you said above. I am refering to Part 1 and Part 2 on 8-24-2010. There wasn't a qualifier and, correct me if I am wrong, intimated that people would work more if they were taxed less. The orginal statement was also centered around income tax and didn't specify corporate taxes.  
 
In addition, other factors were left out which we have discussed previously in regards to our increased revenue during that time period. I disagree that you can point to the tax cuts as being the reason why this happened. It's my view, based on what I already knew and the research I did to respond to your points, that the cuts were not the reason for the increased revenue.  
 
So, I just want to be clear here, by saying that Laffer was correct, do you subscribe to supply side economics for only certain situations or on a macro level?  
 
Incidentally, I'm not a strict Keynesian. In fact, as my continually delayed response to Ken (sorry!) will contain a summation of my economic views which start with an Orwell quote about Hayek.

I'll skip the "you don't understand" stuff if that's ok...    

No, not really.

This is why you fail - you skip the stuff you don't like and just imagine that things fill in the blanks.

DJ and I both gave you explanations of what the "Laffer Curve" is and what it _means_.

We find that revenue increased.    
No doubt that it did but I think it was for different reasons. Nonetehless, good analysis of Mankiw.    

The "reasons" are irrelevant, which if you'd stop, LEARN SOMETHING, you'd UNDERSTAND.

But no, you have to act like the big man, who knows all - it's a threadbare and transparent disguise, it doesn't stand up to any scrutiny.

Now, back to what I said:


It's an idea. A projection. A description of human behavior.  The Laffer Curve, as it's taught in the general, does not have any specific values on the X and Y axis.  Historically, you can assign them, as you look back.  But the concept of the Laffer Curve is not, as you misunderstand it, to merely decrease taxes.  It's that at the apex of the curve - or technically, the highest apex, because a real Laffer Curve can have more than one - has the maximum revenue. Increase taxes above that, and your revenue decreases. Decrease it below the apex, and they decrease.  
 
This also presumes that maximizing government revenues is the best use of the money. I disagree with that concept, wholeheartedly , but that's another subject entirely. The Laffer Curve has been demonstrated historically numerous - times. You can look at New Jersey and Maryland right now, in the last 2 years to see it's import. They raised tax rates, and their revenue plummeted.  

This is not what you described, and in fact, right after that was posted, you mistakenly called it a "Theory" - which is another word you use, and don't understand.  Right there is the proof of that, Mark. You misused it. AGAIN.


I do agree that it does work in a mirco fashion, if you will, in either smaller subsets or in certain economies that have insanely high taxes.

Go back, and read what I said again. Or what DJ said. Either will work.  Because you are not agreeing with either of us. Because we understand the concept, and you do not.

It "worked" in '62. It "worked" in '80 - and you didn't address that Mankiw was addressing a different number than you cited him in rebuttal to.. It "worked" in '02. It "worked" in '06 and '08 for NY, NJ, and Maryland.

But "worked" is in quotes because that's not how it works.  And at this point any college graduate should be able to understand that. (and most who didn't go to, or graduate college.)


 It's hard for me to look at things in the framework of your question. 

Yes. We know.

This is why you fail.  Trust me, I wouldn't work 2x the hours for .5 the pay. Neither will most people.

But you expect them to.

So, I just want to be clear here, by saying that Laffer was correct, do you subscribe to supply side economics for only certain situations or on a macro level?    

Go back, and read either or both of our comments.

Because you have no fucking clue right now. None.

Stop trying to lecture US. Stop. Take notes. Learn something.

Ken, I just want to add another comment apologizing to you for not commenting on your thoughts. I'm hoping I will have more time tomorrow to reflect more upon them and discuss.

The reason why Reagan wanted to use it was because he lived it. He would only make four pictures a year and then "go off into the country" so he wouldn't have to pay higher taxes...which at the time was 90 percent! So, in that environment it has been shown to work. You get taxed higher, you don't want to work. But our tax rates right now are very low compared to that time as well as many other countries.

While conceding that 'anecdote' is not the singular of 'evidence', I have also personally seen the same thing at work in.... let's see... 3 doctors, 2 stagehands, a consulting engineer, a concrete finisher and a guy who made fiberglass and kevlar enclosures for aftermarket aircraft avoinics packages. That's since 1995. They get to a certain level of income for the year and then they stop working, because if they continue they go into a higher tax bracket and have less net income for the year.

I'll concede that the doctors and the engineer may be considered "rich", although they didn't consider themselves so and they certainly weren't in Reagan's league. The other half of that group aren't rich by anyone's measure.

No doubt that it did but I think it was for different reasons.

And what do you think those reasons are?

GoF:


And what do you think those reasons are?

(Prediction here)

Nothing verifiable or checkable. But feeeeeeeelings.

But in the meantime, he thinks he's "rebutted" the Laffer Curve. Because he doesn't understand those "other reasons" are part of it.  But he'll launch off of that question, rather than deal with his lacks.

Oh, and per the Reagan comment:

" He would only make four pictures a year and then "go off into the country" so he wouldn't have to pay higher taxes...which at the time was 90 percent! "

The top rate was 90% at the peak.  Where do you presume he'd have run into that?  Furthermore, and DJ educated you on this previously, there's a massive difference between marginal and effective rates.  Again, basic info, that you skip over to have a better story.  Problem is, fiction ain't a good predictor of the future.

Damn, DJ, nicely done.

***sigh***

I'm never going to get to Ken's comments, am I?

DJ, I will commend you on a much more thorough explanation. Had you done this in the beginning, things might have gone much differently. Chances are that we would not have had such a long thread but then it wouldn't have been as much fun. You narrowed your focus well and, in many ways, proved a more precise point that you were trying to make.

As I read through your explanation, something became very clear: you look at the economy like an engineer. I suppose that's alright considering that mathmatics play a part in economic theories and systems. But math isn't all there is to explaining why economies behave the way they do. More specifically, it's not the only way to explain why revenue behaves the way it does. What I'm basically saying is that you aren't looking at the economy like an economist. At least, not completely. That's cool because you aren't one. For that matter, neither am I. It's hard for me to not look at it from the sociological and psychological point of view so seeing the math is always refreshing and obviously an integral part.

I understood the Laffer Curve, and what it predicts, decades ago. I just explained what it predicts, and that it workes only in certain situations. I am not interested in ponies. I WILL NOT PLAY THAT GAME WITH YOU. 

This statement is really the crux of our problem, isn't it? Since you won't answer my question, I'm not certain if you are a supply sider or not. I am not. Nor am I Keynesian. Nor an Austrian. Nor a laissez-faire proponent. In fact, I'm not sure there is a model that can apply to our predicament right now but that gets more into what my response to Ken (coming soon, I hope) is going to be centered around. If I had to be pinned down, I guess I'm a Manzian.

Anyway, this entire thread, I think you were trying convince me of two different things. The first was that the Laffer curve has merit and is sound in certain situations. I agree. But you have continued to intimate (and have done so, in my opinion, since the beginning) that it was sound on a larger scale. The only way to know this for sure is if you answer my question regarding supply side economics. If you are a supply sider, this is where we would disagree. This would also be the part where we will, in all likelihood, fall back into the pattern that we see (again) in Part 6 of your comments...whether you answer the question or not.

If I think that  the explanation as to why revenue increased in the years we are talking about cannot simply be attributed to the Bush tax cuts, so what? If you do think so, also so what? The opinion that I have is based on my knowledge, research, and economists who, thankfully, think like economists. The opinion you have is based on your knowledge, research and economists as well. What a shock...two people are having a disagreement about the economy and we're not even economists! Economists have these same disagreements all the time...even with themselves...which is why President Truman yearned for a one armed economist. 

So, if your goal was to show me that the Laffer curve has merit in specific situations, you did that a long time ago in this thread. And I agreed with that before we even started...seeing it more fully with some of th research I did (the AEI study). But if your goal was to intimate a much larger economic trend and proove a theory regarding supply side economics, I suspect I would disagree. But I don't know for sure.

"The only way to know this for sure is if you answer my question regarding supply side economics. If you are a supply sider, this is where we would disagree. This would also be the part where we will, in all likelihood, fall back into the pattern that we see (again) in Part 6 of your comments...whether you answer the question or not." 

I think you are trying to go about this starting from the wrong end of the discussion.

It's proper to start by discussing the base facts and figures, then once those are agreed upon you move to theory and discuss the potential results of the differring approaches. Then, and only then , if there is no cut and dried consensus upon the prevailing theories, do the parties claim to which theory they will each individually observe.

When you start out by insisting that the parties claim their positions before the discussion can even begin, the the discussion has no opportunity to be anything other than adversarial rather than educational. Further, when starting at the end point the discussion ends up wading backward through theories and the facts and figures that back them - it's all rather inneficient, confusing and ripe for error in communication.

You don't need to know if DJ is a "supply sider", because until you and DJ can agree upon the basic facts and figures that are true no matter what theory is to be discussed at a later time, that later discussion can not happen.

Since you won't answer my question

22.
15.

You were saying?

I'm not certain if you are a supply sider or not.

It. Does. Not. Matter.

Laffer is irrele.... Oh, fuck it. 

Mark, this is why we must nuke the educational systme from orbit. Not only after detailed tutelage, but after repeated factual correction, you still think you're better prepared to lecture on this than we are.



I am not. Nor am I Keynesian. Nor an Austrian. Nor a laissez-faire proponent.

Nice list of words. I bet they impress your teachers.

You fail. Mark.  Graphically. Classically. With malice aforesight.


The first was that the Laffer curve has merit and is sound in certain situations. I agree.

Despite correction after correction after correction, after DJ laid this out for you MATHMATICALLY, you insist on misusing this concept.

Just like all the others you misuse.

So, Mr. Answer. The. Question.

Which is more? 22? 15? You can at least give me what serves you for "logic" and tell me why you won't answer that. I'm sure it will be entertaining.

Kevin, I agree with what you are saying above. If you are on the right side of the curve, revenue will increase for that particular subset of tax payers. That would be the "certain circumstances" part. That part is the sound part of the argument because he is focusing on specifics. But if you read through the rest of his comments from way back in the beginning of this thread they are riddled with opinions and a very generalized view that intimates support of supply side economics and derision of any other theory...especially those held by the Obama administration and many Democrats. Now, I know he does support the president or his council of economic advisors but I'm not sure where he stands on supply side economics.

And now, as I have been very rude to him, must move on to Ken.

So by GDP alone, assuming one accepts the argument for GDP as a criterion variable for the health/strength of the economy, if we jacked the deficit to 20% of GDP, the economy would be even healthier, wouldn't it? Why stop at 20%? Why not 200%? We'd all be rich -- RICH, I tell you, beyond our wildest dreams! Ahahahahahaha! Whee! This economics stuff easy!

I'm going to take some small sections at a time. First of all, this was hilarious. Very funny, dude!

I put the GDP numbers above as a general guideline. But should GDP be the sole indicator for the health and strength of the economy? No, because GDP does take into account things like intermediary goods or goods produced by citizens outside of the country. And what about good produceds in the past but resold? We would also have to look at goods and services produced and consumed in households which GDP does not. In essence, when one uses GDP as an indicator of a country's income, it's usually less than what it really is which means that the numbers we see in my above graph are probably more conservative and likely not the full piciture of the health of our economy.

But that is the number that people go on so it's all about that perception.


But how different is what the State is doing from a household (or any entity engaging in economic exchange) using credit to buy what it cannot by with its current revenue? If I go get five more credit cards and increase my consumption by $20,000, am I -- depite the increase in my "personal domestic product" -- truly more prosperous? 

Well, in my view, not much different. Great analogy b to the w. It perfectly sums up why we got into this mess in the first place. People went out and spent more money than they could afford. They ran up credit card debt and sunk that debt into their houses. The financial services industry did the same thing on a macro level....taking otherwise sound money (Joe Cassano at AIG) and packaging it up with CDOs and then spending that money from "profits" that were pure air.

Now we have the government spending way too much money on a wide variety of programs that could easily be cut in my view. I think everyone agrees that there is waste in the government. Thus far, we have no one that is willing to do anything about it in Congress. I say Congress because they control the spending. If President Obama wanted to cut the budget in a massive way, he couldn't do it. So, there needs to be a change of thinking in Congress by both parties. It will be interesting to see what the non partisan commission says on Dec 1. And this, after the election.

One thing to note, though, is the current high level of government spending. I'm not a strict Keynesian but there are times and specific circumstances when his theories apply. This would be one of those times. I shudder to think of the alternative given how interconnected our banks, financial services, housing industries and other services have been for the past 11 years.

"sums up why we got into this mess in the first place. People went out and spent more money than they could afford. They ran up credit card debt and sunk that debt into their houses."

Except you're blaming the people for this when in reality uncle sugar at F. May and F. Mac was co-signing for any semi-literate who could make their mark on the loan app. And with the fed backing making even Joe the itinerant street sweepers' quarter million McMansion loan a no lose proposition for anyone with a dollar to invest it's then a no brainer that such commodities became a hotly traded item. 

Urban housing projects were such a success, the govt decided to move into the single family housing market with spectacular results!

They were a smashing success.

By some definitions.  Almost as if it were planned.  Gee, have we seen anything else where there's a government program that tends to result in dependency?

Except you're blaming the people for this when in reality uncle sugar at F. May and F. Mac was co-signing for any semi-literate who could make their mark on the loan app.

Fannie and Freddie were part of the problem but the sub prime garbage started in CA. If you want to know where it all started, watch this video, thankfully now available online.

http://www.hulu.com/watch/59026/cnbc-originals-house-of-cards

It's around 90 minutes but well worth the viewing. This was originally shown to me by last in line, a guy who falls ideologically in line with many of you. If we are going to continue to discuss housing issues, this in depth analysis is a must.

government as Robin Hood'

The bloated size of the federal government prevents them from doing any saving of anyone at this point. That's why I tend to fall more in line with Kevin's idea of government par sedimentation then the power grab theory. A tank is a very powerful and effective tool but when it is raining out and the mud is several feet deep, it's useless.

GOF:

If you'll forgive me for crossing subjects into education, this (I believe) is the real core of the problem with US education. It's not what kids are being taught, it's what they are not being taught: Logic and Rhetoric.

That's certainly part of it. But part of it is also "self-esteem".  Whatever you did, it must be the best! Yaaaaaaaaaayyy!!!!!  Hey! you Did It! Doing it is more important than doing it Right! Or correctly!

Thus the ludicrousness of Mark telling us that Critical Pedagogy (part of which explicitly defines that there is no objective truth to be found) isn't really all over the place (despite the evidence) and while he's insisting that there is no objective truth to be found here.

The fact that he cannot set a goal, and follow through with it, but must, must, must move the goalposts.  The issue he has with never, ever, ever, admitting error adds to that. And his attempts to ignore - and insist that other people follow his rules and ignore - the evidence of that.

They aren't being taught how to frame an argument, nor are they being taught how to defend one. Add a lack of mathematics and poor language skills into that, and teaching someone to think is like giving music lessons to someone you have deliberately deafened.

Quite.  Or perhaps, giving music lessons without any regard to what's gone before, and without reference to sheet music.

The reason for that is because no matter what they know in their heads, nor how accurate or innacurate that knowledge is, the chances of them communicating it effectively to anyone else is zero.

But you must feel fiercely, and anyone who disagrees is wrong. Even though there's no objective reality. Yours is.  (The self-negation in that principle, of course, shall be ignored.)

Russell:

Then it all becomes a game of playing on emotions.


It's a pre-adolecent view of the world. Because. Because I say so. Which is why you have to talk to pre-adolesents like that.  "Why do I have to do this?"  Because I say so.  Which in turn is how they view the world - because they haven't learned enough to understand base concepts and advance them. I want this right now.  Why?  Because.  But what about later? 

Many people never grow out of this. I can tell you of friends who make bad decision after bad decision because they refuse to plan for the future. But at least when they're complaining, they understand that they COULD have done differently and they COULD have planned. They just didn't.

This is why critical thinking, learning to understand why you're doing something, self-introspection has to be a learned skill.  You don't develop it by yourself, because there's no real reason to. Until the world intervenes.  And in the school system today, they're all about not allowing that to be learned.  They don't teach it, and they specifically and intentionally try and avoid it. Because I said so. 

And that's pretty much what you can take from Mark's stuff here.  I've explained it, DJ did so mathematically, and Mark is still stuck in because I say so, that's wrong. Why? Because I said so.

A tank is a very powerful and effective tool but when it is raining out and the mud is several feet deep, it's useless.

Mark:

Stop with the attempts to illustrate.  Please. You don't do that well.. Even though you won't listen to me there, either.

But trust me, your attempts to illustrate just further prove what you don't know you don't know.

This, by the way, is why Austrians of the Rothbardian persuasion

Rothbard, eh? What a character he was...anyway...as his been common with your points above, excellent observations!

If sufficient foreknowledge of conditions and requirements are not obtainable, central planning (state intervention in the economy to good effect) is impossible. Keynes elsewhere wrote favorably of some form of "well-managed capitalism," but the argument is self-refuting.

This reminds me of something Ed said on my blog a while back. "It is the government's job to protect the citizens from force and fraud." Now consider this quote from George Orwell regarding Hayek.


[A] return to 'free' competition means for the great mass of people a tyranny probably worse, because more irresponsible, than that of the state."

Review of the Road to Serfdom by F.A. Hayek, etc" As I Please, 1943-1945: The Collected Essays, Journalism & Letters, Vol 3

If the government is at least a player in central planning, it is very difficult for them to protect us against force and/or fraud. Hence the reason why see things happen today in places like Mossville, LA or the PG & E debacle. And when both parties are essentially lap dogs for corporate interests, their willingness to protect us against force and fraud is virtually non existent.

We may find ourself in agreement regarding the Fed. I'm always amazed at the number of people who have no idea that the Fed is a privately owned bank. They think that it is owned by the government. Depending upon where you fall ideologically, I suppose, one sees one to be the tool of the other.

"I'm always amazed at the number of people who have no idea that the Fed is a privately owned bank."

That is at best only half the story.

From the Federal reserves website:

http://www.federalreserve.gov/generalinfo/faq/faqfrs.htm#5

Who owns the Federal Reserve?

The Federal Reserve System is not "owned" by anyone and is not a private, profit-making institution. Instead, it is an independent entity within the government, having both public purposes and private aspects.
As the nation's central bank, the Federal Reserve derives its authority from the U.S. Congress. It is considered an independent central bank because its decisions do not have to be ratified by the President or anyone else in the executive or legislative branch of government, it does not receive funding appropriated by Congress, and the terms of the members of the Board of Governors span multiple presidential and congressional terms. However, the Federal Reserve is subject to oversight by Congress, ...

Well, that's what they say but if you read further in your link...


The Federal Reserve's income is derived primarily from the interest on U.S. government securities that it has acquired through open market operations. Other sources of income are the interest on foreign currency investments held by the System; fees received for services provided to depository institutions, such as check clearing, funds transfers, and automated clearinghouse operations; and interest on loans to depository institutions (the rate on which is the so-called discount rate).

So, who owns shares in the Fed? And why is that the GAO is not allowed to audit transactions for or with a foreign central bank or government, or nonprivate international financing organization?

Yes, it is technically true that Congress has authority over the Fed but when you have a large number of lobbyists from the banking and financial services industry assigned compared to the small number of elected representatives (and writing position papers for them), what sort of control is that?

"So, who owns shares in the Fed?"

From the link:

the Reserve Banks issue shares of stock to member banks. However, owning Reserve Bank stock is quite different from owning stock in a private company. The Reserve Banks are not operated for profit, and ownership of a certain amount of stock is, by law, a condition of membership in the System. The stock may not be sold, traded, or pledged as security for a loan; dividends are, by law, 6 percent per year.

"And why is that the GAO is not allowed to audit transactions for or with a foreign central bank or government, or nonprivate international financing organization?"


Not sure where you got that, but also from the link:

To ensure financial accountability, the financial statements of the Federal Reserve Banks and the Board of Governors are audited annually by an independent outside auditor. In addition, the Government Accountability Office, as well as the Board's Office of Inspector General, can audit Federal Reserve activities.

Under the Federal Banking Agency Audit Act (enacted in 1978 as Public Law 95-320), which authorizes the Comptroller General of the United States to audit the Federal Reserve System, the Government Accountability Office (GAO) has conducted numerous reviews of Federal Reserve activities. In addition, the Board's Office of Inspector General (OIG) audits and investigates Board programs and operations as well as those Board functions delegated to the Reserve Banks. Completed and active GAO reviews and completed OIG audits, reviews, and assessments are listed in the Board’s Annual Report (before 2002, the reviews were listed in the Board's Annual Report: Budget Review).
The Board's financial statements, and its compliance with laws and regulations affecting those statements, are audited annually by an outside auditor retained by the OIG. The financial statements of the Reserve Banks are also audited annually by an independent outside auditor. In addition, the Reserve Banks are subject to annual examination by the Board. The Board's financial statements and the combined financial statements for the Reserve Banks are published in the Board's Annual Report.

Not sure where you got that

http://en.wikipedia.org/wiki/The_Federal_Reserve#Government_regulation_and_supervision

That's quite a list of four things hence the reason why there are so many conspiracy theories floating around out there. If the GAO may not audit these four types of transactions, how does that affect Congress's ability to oversee it?

And we also have this.

http://en.wikipedia.org/wiki/Criticism_of_the_Federal_Reserve#Private_ownership


Some have criticized this quasi-private arrangement, claiming that the Federal Reserve System is a private bank. For example, Charles August Lindbergh objected to the private ownership of the Federal Reserve banks, complaining that the financial system "has been turned over to the Federal Reserve Board ... [which] administers the finance system by authority of a purely profiteering group. The system is Private, conducted for the sole purpose of obtaining the greatest possible profits from the use of other people's money."[52]

Just so we are clear, I'm not refuting your comments. They are obviously true as well. It's the quasi-public, quasi-private nature of the Fed that leads to many questions and a whole lot of gray. As I said above, depending upon where you fall ideologically, I suppose, one sees one to be the tool of the other.

Just so we are clear, I'm not refuting your comments.

That's "refudiating".

Sorry, I just couldn't resist.

Oh, come now.

Surely we can muster enough intestinal fortitude to stagger across the 300 comment line?


I would point out that this entire "tax does/doesn't do something desirable to some privileged section of the economy" argument entirely fails to address the elephant sitting in the middle of the room:

That using taxation and quasi governmental monetary policy as a lever to manipulate money and markets is wildly extraconstitutional in the first place, and not in the government brief.

To some degree, engaging in the argument concedes/legitimizes a governmental role not as an impartial umpire of the market, but as *the* primary mover.


But if pursuing that line of thought doesn't interest anyone, I also offer these alternative thoughts to get us across the threshhold:

 "Marxy is a poo poo head!" and  "John Maynard Keynes eats muppets!"

Folks, we'll make it. Hopefully I'll have some time later today to address some more of Ken's great points. His list of nine items above regarding the principles of economics alone are worth at least 20 or more responses.

B to the W, Kevin, what is the record for most comments?

That using taxation and quasi governmental monetary policy as a lever to manipulate money and markets is wildly extraconstitutional in the first place, and not in the government brief.  

Hey, I addressed that. Well, mostly. You saying you didn't RTWT?


This also presumes that maximizing government revenues is the best use of the money. I disagree with that concept, wholeheartedly , but that's another subject entirely. 

If we can't get Mark to comprehend the nature of the Laffer Curve, which has a lot more than taxes to recommend it, I don't think we need to be discussing more meta-issues.

Because *that's* even MORE complicated.

I'm sure I can eat up another 8-10 asking Mark why he won't answer which number is greater, and him refusing to answer, but demanding answers of us to his strawmen. 

Well, this is cheery:

I have a very disturbing email that came in this evening.

It alleges out-and-out fraudulent reporting of home sales in one of the regional MLS systems.

That is, prices paid that are in fact much lower than the "sold" prices reported in the MLS.

The person in question claims to have seen over 100 of these in his area.  I have copies of two, and it appears, from the evidence that I have, that at least for those two the claim is accurate.

One in particular I was able to pull the auction data on.  It "sold" under reserve, is listed as sold in the MLS at ~25% higher than the "sold" bid, and the premium is disclosed as 5%.  This property also has a 90-day "anti-flip" provision on it, implying that the paper may be held by one of the GSEs.  (It's a nice-looking place, incidentally.)

Here's the problem, obviously - Case-Schiller and other "home statistics" numbers related to price paid are all computed off these numbers provided by the local Realty boards (via NAR.)  If the data in the MLS is bogus then so is the so-called "median sales price" and so are Case-Schiller's numbers!

These are not small discrepancies either - in both cases the "over-reporting" is by approximately 25%!

http://market-ticker.org/akcs-www?post=165800

300!

This ...is...SPARTA!

Why stop at three hundred?!

I bet we can keep this party train a-runnin'

How about: Repeal the 17th Amendment!

And of course, if we accept Mark's claims about Obama's gun cred (that is, he voted for a rider with no opposition, that has never been used, tested in court)....

And give him a net of +1 on guns (as Mark does, ignoring his Joyce time, his other comments, legislation in IL, etc.)....

Looks like he just went negative. Whoops.

Obama import ban on rifles confirmed

Yeah, we don't want 60 year old rifles falling into the "wrong hands." (Why do I think he means _us_?)

Your read meat story of the day:

http://ace.mu.nu/archives/305313.php

Tasty, wasn't it?

Now, for those of you who won't go there (pushing a mouse button is SO hard), I'll quote the lede, from the title onward, for posterity:

"Obama: Hey, You Know What Might Be a Good Idea To Boost The Economy? A Payroll Tax Holiday

"Who proposed that? Oh yeah, I did. And so did thirty thousand economists.

"Two years ago. On the theory -- see if you can follow this logic, because it gets twisty -- that if you reduce the cost to employers for hiring and maintaining staff, they might actually hire and maintain more staff.

"Did you follow that? I know, it's heady. Let me try again:

"If costs for a thing go down, you can afford more of it.

"No? Still too complicated?

"Here, here's a talking sandwich then.

"Hey, fucklebuns! It's easy as baby-shit, see?
If hookers lower their prices by 5% you can buy 21
cooch-whores for the cost of 20! What are you, touched?!

"You get it? Yeah, well, see, Obama didn't get it, and I think they had to invite time-travelling baloney sandwich Johnny Coldcuts to the White House to make him understand.

"But now, facing a double-dip Great Recession largely of his own design, suddenly he's willing to confront all sorts of disturbing scenarios, such as the bizarre notion that when taxes are reduced, economic activity increases."

Now, wasn't that fun?

Alright, it's time to dive into Ken's Nine Points...let's bring them down here so we don't have to scroll back up so far...

1. People act.  
2. Every action has a cost.  
3. People respond to incentives.  
4. People make decisions at the margin (they make trade-offs).  
5. Trades make people better off. (Tooting the horn of my own discipline, the late great Wroe Alderson (1957, 1965) defined marketing as -- paraphrased -- exchange of items in the assortments held by A and B such that the value of A and B's assortments after the exchange are both greater than they were before.)  
6. People are rational (might be better to say they do things they expect to provide them with net benefits). Carden's elaboration of this point is a must read; "people are rational" does not equal "people are Spock." I add on my own hook that some utilities are intangible and known clearly only to the beholder.  
7. Using markets is costly, but using government can be costlier still. This gets into transaction costs, an interesting subject in business (where it is germane to the "make or buy" decision) as well as in economics. I will write a post at my own blog (real soon now) about the way State action distorts transaction costs in business.  
8. Profits tell businesses they are helping others, while losses tell businesses they are wasting resources.  
9. We shouldn't ignore the long-term and unintended consequences of policies and actions. If you've ever heard the term "broken-window fallacy" (see Bastiat and Henry Hazlitt), this is the point they're trying to make. It differs from the precautionary principle (waggishly summarized as "never do anything for the first time") by actually attempting to trace out the consequences of an action to everyone, not just particular groups. Again, Carden's explanation is better than mine.

In many ways, these points are similar to Mankiw's ten principles of economics. Before we get into talking about Ken's points and compare them to Mankiw's points, let's take a look at how Mankiw groups his ten points. 

How People Make Decisions
1. People face tradeoffs
2. The cost of something is what you give up to get it
3. Rational people think at the margins
4. People respond to incentives

How People Interact
1. Trade can make everyone better off
2. Markets are usually a good way to organize economic activity
3. Governments can sometimes improve market conditions

How The Economy Works as a Whole
1. A country's standard of living depends on its ability to produce goods and services
2. Prices rise when the government prints too much money
3 Society faces a short run tradeoff between inflation and unemployment

Ken's Points 1, 2, 3, 4, and 6 bascially fall under the "How People Make Decisions" umbrella and largely fall in line with Mankiw. It's important to note that Mankiw frames rationality in terms of thinking at the margins. So that would be a combination of K4 and K6.

On the whole, I do agree that this is an excellent way (by both Ken and Mankiw) to frame an economic discussion. But, as I have been saying all along in this thread, there's more to analyzing human behavior than the rational choice theory. In many ways, this is why we have so many disagreements about many issues. I tend to look at behavior from a wider view. While I agree with the rational choice model (Smith), it is only one of two basic tenets of interactionism. Sociologist William Kornblum

Rational-choice models of behavior prompt us to look at patterns of behavior to see how they conform to and depart from normal expectations of personal profit and loss. But those models do not always identify the underlying values. How we learn what to value in the first place, how we communicate our choices and intentions, how we learn new values through interaction-all are subject s that require other concepts besides those found in rational choice theories of behavior.

So, it's not simply that people's inherent interest to seek the most pleasure and minimize their pain. It's also about the symbolic interaction of our every day lives. How do we decide what is "good" to have and what is "bad?" I think that part of the reason we arrive at the answers we do come from our interactions with others. How someone is greeted, for example, at a meeting varies from culture to culture and the value of it is constructed by each culture. This interacton (face work) plays a part in how business is conducted on a daily basis.

There's also the fucntionalist perspective. It's not enough to say that "People respond to incentives." Many here have stated that people will work more if they are taxed less. In certain circumstances and tax brackets, that may be true. But how much I am taxed has no bearing on how much I want to work. I would do what I do for free because I love it. So would many other people in our society...if they took the time to find this out. I saw an interview with Warren Buffet recently and he said that the trick is to find something you love and make a living at doing it. Too many people fail to do this and, as a result, are simply extrinsically motivated.

No doubt, though, our culture is very extrinsically motivated. We want the 4G iPone, the flat screen and the nice car. People, however, get these things and still are not happy and then they lose their incentive. Why? Because of anomie. The structure of our culture defined "incentive" as being material based. This is why I tend to fall more on the functional side of the equation. The various groups and communities of our culture define reward from working hard in a monetary fashion. When this doesn't happen for many people, even if they do make money, the feel like they don't function well within the defintion of our structure. If our culture defined motivation and incentive differently...from an intrinsic point of view...we might have happier and more productive people. Our incentive for doing something shouldn't exlcusively be based around material value but around mental, emotional, and spiritual value as well.

The third basic theory of human behavior is conflict theory. Certainly when there are events like war and natural disaster, who has the power plays a part in everything we are discussing. Obviously, this is where Marx comes into play but his theories have largely proved false because there can never be such a thing as a classless society. And when the people own shares of stock in the company they work for, how can they be in a different class than the owners? Time has shown Marx to be completely wrong.

Noticeably absent from Ken's points is this...


Governments can sometimes improve market conditions 

Mankiw states there are two broad reasons for a government to intervene in the economy-to promote efficiency and to promote equity. He goes on to discuss externality which is essentially what happened when Joe Cassano decided to blow a 500 billion dollar hole in the universe. Many "bystanders" were affected by this and that's where government comes into play. I had someone post this on my blog recently.

The genesis of the wall street mess, simplified, is:
1. Home buyers got greedy and did not do their homework, but they all wanted to buy.
2. Mortgage marketers got greedy and did not do their homework, but they all wanted to sell to those eager buyers.
3. Wall street brokers got greedy and did not do their homework, but they all wanted to buy. Likewise, they all wanted to sell to eager investors, who likewise got greedy and failed to do their homework.
4. The SEC was too busy watching porn on the job to actually do their jobs.

This is essentially the point of the doc "House of Cards" that I urge all of you to watch.

Mankiw admits that market failure, of which externality is a part, is an example of how the invisible hand fails to allocate resources efficiently. Market power would be another example and we certainly see that being played out in many ways such as ownership of the media, for example.

On the whole, though, markets ARE the best way to promote economic well being and organize economic activity. I don't want the bizarre hyrbrid of Wall Street, the Fed, and government stoolies that we have right now centrally guiding our economic well being. I want Mankiw's "millions of firms and households" to do it. Like Ed, I want our government to protect us from fraud and force. Ironically, this is the entire point of Michael Moore's last film.

I tend to look at behavior from a wider view.

Or, as DJ says, "Random But Important Sounding Gibberish. "

Obviously, this is where Marx comes into play but his theories have largely proved false because there can never be such a thing as a classless society. And when the people own shares of stock in the company they work for, how can they be in a different class than the owners? Time has shown Marx to be completely wrong.

Ah, I'm glad to see you've changed your mind on this.  So, shall we revisit then, the S-CHIP discussions and the Frosts? 

I would do what I do for free because I love it.

No offense Mark, I'm sure you believe that, but I call bullshit.

The reason I feel confident in this is because I have had one of those jobs getting paid to do what I love. And yes, I have put in 65 hours over a 3 day holiday weekend for that job (not unusual for that type of work), and didn't get paid all that well for it. But I did get paid.

There was a time when I did basically the same job for free, as a form of entertainment because I love it. But I sure as hell didn't put in any hours like that. Why? Because since I was not getting paid for it, I couldn't afford to. I had to budget my time for other priorities, so I could make a living.

But how much I am taxed has no bearing on how much I want to work.

So the reason I call bullshit on this proposition is because 1) I suspect teaching is not your only priority (you are married, right?), and even if your wife is willing to support you, would you be willing to contribute nothing to your household? If not, then you would be in the position I was, above. And 2) somehow I don't think of you as altruistic enough or stupid enough to stay with a free gig that is making everyone but you wealthy. If you were taxed 100% of your income, you'd still teach? Really? So that the government could give it away as a Wall Street bailout, or as a present to the head of your union, who sure as hell isn't doing what he does for free, and is wealthier than you'll ever be in two lifetimes? Keep in mind, this means if you choose to help someone yourself, the resources to fuel your altruism have to be borrowed from your wife.

I don't buy it.

***

And to be honest, I don't see how the Kornblum quote has any slightest bearing on the subject at hand. No two people have precisely the same assessment of "value". That's the only thing that makes trade possible. So far as I can tell, it's completely irrelevant to economics why someone considers something to be of value or not, the only relevance is whether someone considers something to be of value or not.

If I go buy a Ford truck, does it make any difference at all to the salesman, the dealer, Ford Motor Company, or the US economy whether

I want to buy it for my son
I want to buy it to go 4 wheelin in the mud
I want to buy it because I'm depressed and plan to commit suicide by driving it into a bridge abutment
I want to buy it because I need it for work
I want to buy it because I'm I'm a stupid wastrel who doesn't actually need a truck at all

Okay, I'll accept that "I'm buying it because I need it for work" might have an effect on the larger economic picture. But if I get killed in a car wreck on the way home, the salesman, the dealer and Ford Motors don't suffer even a little bit.

The only part of any of those statements that is economically relevant is "I want to buy it".

Obviously, this is where Marx comes into play but his theories have largely proved false because there can never be such a thing as a classless society.

Gah! No, Marx's system has to have two classes, the proletariat and the bourgeoisie, and there has to be a continual revolution between them until there is the glorious workers paradise. He posited that once a true socialist state was in place, the friction would slowly ebb away as the State become defunct. But democracy under capitalism was still just the bourgeois ruling the proles. Wait, isn't that what you keep saying? Business runs government?

Read H.G. Wells "Time Machine" for a critique of Marx's classes.

No wonder you object to being called a Marxist, you have no idea what he's really saying. I, for one, am shocked!

Hey, is anyone else having problems with the 'Like' function? I keep liking things that aren't tagged as such.

No matter what he wants, if he wasn't being supported by his wife, then he would NOT work long hours at a job that didn't pay anything because the bills have to be paid, such as food, shelter, clothing, utilities, transportation, and so on, and so on.  
 
Of course, if my wife didn't make as much as she did or if she didn't work at all, clearly I would have to find a higher paying job, work two jobs, or we'd have to adjust our lifestyle. My point in bringing up that I love what I do is it directly relates to motivation. I think that if more people were intrinsically motivated, our country would be way better off than it is right now. I get the sense that some people here don't like what they do for a living. Is that true?  
 
 
would you be willing to contribute nothing to your household?  
 
Well, it depends on how you define "contribute?" It is it exclusively under the monetary umbrella? There are many ways to contribute to a household. I was the stay at home parent before I became a teacher. My wife went back to work fairly quickly after the birth of our children and I did quite a bit of the "mommy stuff." Did I contribute? In fact, those interactions shaped my behavior (symbolic interaction) and helped to define the things that have value for me.  
 
 
The only part of any of those statements that is economically relevant is "I want to buy it".  
 
But we're talking about behavior and why people behave the way they do. Economics is the study of how society manages is scarce resources (Mankiw). I'm sure you will agree that there is more to managing scarcity than "I want to buy it."  
 
Value is subjective. Which is why the Left never understands property, they want to force their subjective value on yours, i.e. your property has less value to you than it does to the collective.  
 
Value is subjective...which is why you have to look at symbolic interaction...all the little and seemingly mundane communications that we have every day...as something that defines value. I have a friend whose daughter asked her how old she was when she got her first cel phone. My friend answered "27." The daughter, who is 10 and desperately wants a cel phone, than proceded to pepper her with questions like "What kind of phone did you have?" to which she answered, "It was attatched to the wall at home with a rotary dial on it." The daughter had no idea what she was talking about and then wondered, very cutely, "So....you had to take it off the wall to have it with you every time you went somewhere?" Our society has now defined phones as a necessity to have everywhere. This as come about through symbolic interactionism. Teenagers text constantly because they saw others placing value on it so they changed how they communicate.  
 
And, Russell, please join me in a cessation of generalizations about people.  
 
the resources to fuel your altruism have to be borrowed from your wife.    
 
See, you are still thinking exclusively within the rational choice model and at the margins. My "altruism" could be something as simple as peforming the duty of child psychologist for no charge...which I essentially do every day...with my children...the neigborhood kids...the kids that I teach and coach. As Mastiff said in the EDU thread, "the rare, blessed few who would have spent their lives in darkness, were it not for the intervention of a single, providential teacher who somehow kindled a spark. "  
 
And where does that child end up who has that guidance? What value do they have?  I strive to be this spark every single day and will do so for the rest of my life. I will never retire unless I am forced to or am physicaly unable to perform my duties.This spark could lead anywhere and this would be why I cheerlead all of you to go and mentor a child. In the final analysis, my goal for posting here is to one day see no comments from my posts because all of you are too busy (as Mastiff would say) out turning children "into the next Franklin." 

"And, Russell, please join me in a cessation of generalizations about people." 

Nah, my Cult(tm) membership gives me discounts at the local Death Merchant.

Besides, I keep forgetting you don't understand set theory.

Now, THAT'S funny. Imagine YOU chastising someone else about jumping to conclusions.

I certainly have. I admit (and have admitted) that I was in error in generalizing about people. Will you? And that wasn't chastising...it was a kind request. He can choose to ignore it.

if you're spending 8 hours a day working for free that's 8 hours a day that you are not doing any of that for your family. 

Ah, I see where you are coming from now...if I was at home for 8 hours than I would be contributing. My point in mentioning that I would work for free was more along the lines that if I was wealthy, I would still do it. It's not about the paycheck. In addition, when my children were younger (before I was full time) I volunteered at their school and served on the site planning committee. I still do, actually, as it gives me time at the grade school level of which I don't get enough. It wasn't 8 hours a day but it was, at times, 3-4. Was that contributing a resource to my family or not?

Good questions.

1. Tell the singer that he has to have a back up plan and figure out something else that he loves to do to help him get by. Working in a music store? Managing singers? Tell him if he truly has his heart set on it he is going to have to bust his ass to be one. It's funny that you bring this up....I was in a band and I have a tin ear! The lead singer used to rip me a new one all the time for singing so flat. I took voice lessons, worked hard at it, and because I loved it as much as I did, became passable...barely, though. The point is, GOF, that if he loves singing and his heart is set on it, any effort will seem minimal.

Of course, this doesn't even bring up the various challenges associated with getting into the music business. This also gets into the notion (delusion, actually) in our culture  that "if I just get lucky, then I'll make it big and be set with a ton of money!" (Michael Jordan generation parents-Vinnie Chase generation kids). If the guy is truly intrinsically motivated...if he can find that part inside of himself through self actualization...then his path in life will be fruitful whether he becomes successful as a singer or not. Of course, there is always the church choir...

2. It would be interested to see a study that shows that out of all the garbage people, who wants to actually do it. Earlier in the summer, I said hi to my garbage man and asked how he was doing. Great!, was his reply. I asked why he was so happy and he said he loves his job. I was like...really? He explained that his hours are minimal, his pay is great, he gets to be outside a lot, and he loves the people he works with every day. I couldnt' beleive it. Of course, this is just an amusing anecdote and by no means is a serious study but I did wonder what that company was doing that the others weren't. They've been around a long time in our area so it must be something pretty cool.

So, I guess my answer would be to 1). Do a study on "crappy" jobs and see if they really are crappy. Participant observation and/or polling would probably be the best methods. And 2). Model these types of jobs after my local waste management company and other successful models. Of course, there is always the option of......ROBOTS!!!!

The other glaring flaw in this line of reasoning is it presupposes that the person who is deciding what he wants to do with his life is in fact qualified to judge. My experience has been that it's a rare person who knows what they want out of life earlier than their mid 20s. This is perfectly understandable because until you've been out on your own, paid your own bills, had to be your own rescuer when you did something stupid, you don't have the real world data to judge what you think you want against what it costs. Up to that point you're living in a fantasy world where if you don't work you still have a place to live and food to eat.

I've known any number of teenagers that "aw man, I wanna learn to play guitar!" I've only known a very few who wanted it bad enough to still want it when their fingertips were bleeding and their arms were sore all the way to the shoulder. That's not meant to belittle anyone either, that's just an example of how easy it is to see the "ooo, I'd love to do that" aspect of something and miss the "wait, you gotta do WHAT?!?" aspects until you're already committed.

Puberty through mid 20s is when people mostly fall into that trap. They haven't yet learned what it looks like from all angles, see? So how late do you propose to wait to show someone how to do what they want for a living? And who feeds them while they're figuring it out? Keeping in mind of course that until they're feeding themselves, they are not acquiring the real world data they need to be qualified to choose.

I agree that in the process of making sure they have a roof over their heads and food in their bellies, people tend to forget that in an ideal world the roof and the food and etc. would be means, not ends. But since we don't live in an ideal world and aren't ever likely to, I can hardly blame them for keeping the roof, the food, the etc. at the top of the priority list, well above mere "I want".

And I hate to break this to ya, but that spot and the spot where "the one who dies with the most toys wins" are in fact the same spot. It's the spot where you think of the things as the goal, rather than as tools to help you reach your goals.

He can choose to ignore it.

Condescension so thick, you can cut it with a knife!

It's like the past 3 years can be erased simply because Marxy says so.

f you're spending 8 hours a day working for free that's 8 hours a day that you are not doing any of that for your family.   
 
Ah, I see where you are coming from now...

We got sidetracked here. It started out from how much you are taxed affecting your willingness to work.

The fiberglass worker I mentioned above... every year about early October, he stops accepting voluntary overtime hours (or at least that was the case when I knew him) Why? Because if he works them he gets into a higher tax bracket and nets about a thousand dollars less for the year. He has a wife and kids, he can't afford that crap.

Most of the other people on that list work under contract by the job, so after a particular point they just stop accepting contracts for the rest of the year.

Are those outliers? Of course they are, most people are paid by the hour rather than the job, and a fair percentage of overtime hours aren't "offered", they're mandatory if you want to keep your job. But when it is one of their options, yes I know several people who will stop working near the top of one income bracket rather than work harder, get into the bottom of the next income bracket, and lose money.

GOF, you're points are well taken and I was joking about robots although it seems that we are there already.

http://www.nytimes.com/2010/09/05/science/05robots.html?scp=2&sq=Robots&st=cse

I agree that this seems to contribute to the laziness of our country as well as being most impersonal. But it is interesting, no?

My experience has been that it's a rare person who knows what they want out of life earlier than their mid 20s.

I completely agree. This notes a failure at just about every level of socialization in our culture but mostly the fault resides with the parents. Again, this gets into my MJ Generation theory, though.

No doubt, our society is always going to have shitty jobs that no one wants to do and then some people will end up having to do them. So, I agree wholeheatedly with this statement:


A better solution is for people to learn to enjoy what they do and find the good in it, regardless of what that is.

which makes think that, in some ways, we are saying the same thing. This all comes back to extrinsic motivation which I would like to see a shift to in our society.

Russell, it wasn't my intention to be condescending. I apologize. I simply meant that I was making a request which you certainly have the freedom to disregard. Based on past statements that I have made, I can understand why you would be unwilling to do so and take it in such a way.


I know several people who will stop working near the top of one income bracket rather than work harder, get into the bottom of the next income bracket, and lose money.

Clearly, there is precedent for this in some cases. My question is what will they do with that money if the tax is changed so they won't be punished? If they are indeed outliers, how much of an effect will it have on the economy?

He might have less incentive to work harder and earn more at the end of the year because he'll keep less of every incremental dollar he earns, but if he does keep working and earn more, his after tax income will increase.

No doubt, we can all find agreement that our tax system needs to be reformed. And I guess I lean more towards the idea that the Bush tax cuts should stay in place for most income earners until we are out of the recession.

But we're talking about incentive, right? The citizens of our country aren't taxed as much as German citizens, for example, and their results clearly show incentive.

http://www.bbc.co.uk/news/business-10962017

Obviously, with that kind of growth, people are working and spending their money even with all of the taxes they have to pay.

And if you look at the historical tables in our own country, we had an economic boom post WWII and that's when the tax brackets were more numerous and the rates were insanely high. Clearly, there was some sort of incentive--other than tax related issues--to work harder. In your opinions, what were they?

When we talk about incentive, we honestly should talk about intrinsic and extrinsic motivation. It seems to me that people during the post war boom were more extrinsically motivated whereas today it's quite different. Why?

When we talk about incentive, we honestly should talk about intrinsic and extrinsic motivation.

Fine and good, but my earlier point still stands: Until someone has learned to become comfortable with the realities, limits and impositions of extrinsic motivation (Am I gettin paid for this? I mean I love what I do, but I gotta pay the rent too, ya know?) they don't have a solid framework to judge the value of their intrinsic motivation against. Ray Stevens made a gang o' cash having a lot of fun and doing some amazingly stupid and vapid stuff sometimes. Nice work if you can get it. But until you're comfortable within an extrinsically motivated framework, 1) you don't know enough to tell whether you can get it, 2) you don't know enough to know how to change things so you can get it, 3) you don't know if you can afford to get it, and most importantly, 4) you don't know if you want it badly enough to make the commitment it will require in extrinsically motivated terms.

The short version of that is, "No matter how confident a drunk you are, and no matter how long you've lived in the same house, your living room furniture will not get out of your way. Get over that."

Reality doesn't give a damn what your motivation is, and neither does a hungry belly.

I sympathize with you, I really do. You have this weird political bulemia you (and Democrats in general, and a lot of Republicans as well) seem to be suffering from.

But the fact is, eating more of the private sector and throwing up more public sector in hopes that the body of the citizenry will starve a little less for a time... this scenario doesn't end well, ya know?