Chile Forum

Great article on weakness of supply-side economics as preached today:

http://article.nationalreview.com/43188 ... son?page=4

Heck, I think even Laura might agree with some of this one.

John Hyre, Post-Tax Season John with a Little Time

Looking to the National Review for economic advice is like asking a corn farmer how to best catch shrimp.

We have too much spending for useless consumption, public and private, and the main reason for that excess are ridiculously low interest rates that punish savers and reward the hedgies and big banks. If interest rates were at normal levels, supply-side policies would work well enough. I think putting federal and state governments on a diet is going to be difficult now that they've reached the point where buying votes outright is considered normal.

Supply-side economics is a hoax. Cutting taxes results in decreased revenue, budget deficits and increased National debt. Almost all PHD economists consider the Laffer curve theory to be nonsensical.

Go ahead and call me stupid, but it seems to me that we didn't have a problem with budget deficits and out of control spending until the morons got the power to a)tax individuals based on income and b)make as much fiat money as they want to.

john wrote:Supply-side economics is a hoax.

Fixed: most economics is a hoax. The only flavor of economics that has any sort of reliable predictable/replicable power is Austrian. Since most of what most government practice is poorly digested Keynes, we get the nonsense we're seeing. Free money for banks, punishing savers, rewarding crazy risk...

You might want to look into private sector job creation in high tax areas. There's pretty much no net private job creation in Europe since WWII. In countries such as France the high taxation rates result in permanent high unemployment and the private sector diminished to being a minority of the economy at large. Why would anyone want to work twice as hard and bear a lot of risk to get most of their income captured anyway if they're successful? You end up with highly stratified, illiquid societies where people just stay put and very little new business creation. The businesses that do get created often rely on public subsidies while the huge incumbents dominate markets (large cap French companies all date back from the 1960's or older: no Microsofts, let alone Googles). Sure, Sweden has low income inequality, but guess what, wealth is spread as unequally as elsewhere anyway. It's obvious high taxes kill equality of opportunity.

Maybe "most PHD economists" should try working for a living. I don't know, run a hotdog stand for a year or something. Instead, we have virgins giving sex advice backed by bogus equations. THAT is the hoax. When you read the UTTER NONSENSE people like Krugman write (sure, conditions now are exactly like just after WWII, so we can have the same debt/GDP ratio - mind boggles) and they get to influence policy, you know we're in trouble. "Economists" who have no business experience whatsoever have no credibility.

If Bush had done just the tax cuts, but had not started two wars and opened a new entitlement, AND if Greenspan hadn't played wizard with interest rates, then we wouldn't nearly be in the same trouble we are. It's not the tax cuts that are the root trouble, it's the increased spending and crazy money policy.

john wrote:Supply-side economics is a hoax. Cutting taxes results in decreased revenue, budget deficits and increased National debt. Almost all PHD economists consider the Laffer curve theory to be nonsensical.

Where is the statistical proof of your assumptions. I would be interested in understanding your reasoning, but I tire quickly of people spewing out verbage without showing their proof or put in the caveat of "in their opinion". As far as I know you may be an economist, but show me, don't tell me something as profound as what you have just stated.

I'm with fellow moderator O on the technical explanation.

Thing is we were probably near a collapse back in early September 2001 (remember the unwinding of the tech and equities bubbles after the Y2K scare?) when suddenly the US Gov and related entities had an excuse to extend the party almost 8 more years via the defense and security industries and the Greenspan housing bubble.

I've become disbelieving of any type of economical explanation. I am unaware of the Australian model, however. People are so emotional, philosophical about this subject that I tire of any statement by anyone on the subject without showing their sources. Even then, you have to evaluate the statistical model derived to ensure than the #s are fixed and/or that what the autor(s) are saying that the stats, etc. say is actually what is being said. And when people make blanket statements which sounds more like a belief, I shut off immediately. I hate it more when I catch myself doing the same thing which happens more than it should. The weakness of the human mind I suppose, but frustrating none the less...

AUSTRIAN NOT Australian. Do some basic research - Keynes, Keynesian, Montarism, Austrian, etc. There is stuff out there supported by 5000 years of history in line with human nature and foibles. The Keynes dominated thinking in gov and academia has so corrupted the thought processes of people that it is no wonder we keep repeating the same mistakes and believe the same explanations.

Ultimately, all you can do is protect yourself and don't trust anyone who says they can or will protect you and those you care about.

The Keynes dominated thinking in gov and academia has so corrupted the thought processes of people that it is no wonder we keep repeating the same mistakes and believe the same explanations.

AMEN, eeuu...
BTW - your latter thought is a pretty good variation of the accepted definition of insanity

Ultimately, all you can do is protect yourself and don't trust anyone who says they can or will protect you and those you care about.

Does that include the gub'mint?

Hey, now.....doesn't the Full Faith and Credit of the United States Government mean anything to you pipples?

<snicker>

John Hyre, Maybe Dem Austrians Was On To Sumthin

eeuunikkeiexpat wrote:AUSTRIAN NOT Australian. Do some basic research - Keynes, Keynesian, Montarism, Austrian, etc. There is stuff out there supported by 5000 years of history in line with human nature and foibles. The Keynes dominated thinking in gov and academia has so corrupted the thought processes of people that it is no wonder we keep repeating the same mistakes and believe the same explanations.

Ultimately, all you can do is protect yourself and don't trust anyone who says they can or will protect you and those you care about.

Oops! I misread that one...not like five loud crazy kids in the background had anything to do with that. I completely agree with what you're saying. However, I didn't agree with the comment of another post regarding cutting taxes leads to tax deficits, decreased revenue, etc. and that is to what I was referring. The entire problem is not taxes or the increasing or decreasing of them. The problem IS taxes (and everything directly and indirectly associated with them), the politicians drug.

I didn't make myself very clear there. I was trying not to sound too harsh (a difficult task my wife tells me). I will, however, read up on Keynesian, Montarism, etc. over the weekend. I wish I had time to read more, but with five kids and work, it leave me little time to do much else other than post here sometimes and play the piano. I've given up watching TV and sports (I still exercise though) and I've studying Spanish to brush up for when I move down.