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Thread: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    Yes, and your point? 50% of American families or individual wage earners rent or don't own a home. why didn't they benefit from the Bush tax cuts?
    You continue to miss the point; 50% of American families or individual wage earners is not a clear statement. First and foremost, the home ownership rate in the US. has fluctuated between 60% and nearly 70% of all "households". During the peak of the real estate bubble, home ownership was also at its peak, or near 70%.



    Secondly, it still is a considerable drag on our current economy. Even if your 50% number was accurate, the decline still impacts the whole 100%, i.e. GDP will be lower.

    Aw, so now you move the goalposts, so it is now non home owners didn't benefit as much as home owners from the Bush tax cuts? Spendable income increases with tax cuts and that affects human behavior thus economic growth.
    Not at all! Simply making another point.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    IOU's have to be paid for and where does the money come to fund those IOU's when they become due?
    Kinda off topic; but i'll bite.

    Inflation will eat up a considerable amount.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Kushinator View Post
    Follow the money. Where did the proceeds of the tax cuts flow?
    Is it your desire to have the govt. tell a private citizen what to do with their money? Thought Libertarians believed in less govt?

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    Is it your desire to have the govt. tell a private citizen what to do with their money? Thought Libertarians believed in less govt?
    This is a strawman argument that does not even address my comment. The fact of the matter is, tax cuts do not necessarily lead to a sustainable growth economy, in and of themselves. An economy is far more complex than that, all of your anti-intellectualism aside.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Kushinator View Post
    This is a strawman argument that does not even address my comment. The fact of the matter is, tax cuts do not necessarily lead to a sustainable growth economy, in and of themselves. An economy is far more complex than that, all of your anti-intellectualism aside.
    That is your opinion and that of SOME economists, not my opinion nor the opinion of other economists. I hope you don't have a shortage of air on top of that pedestal that you live on as an intellectual superior to the rest of us peons. Too bad they don't teach people logic and common sense out of textbooks because then you would have it all. Tax cuts leads to more spendable income and that affects economic activity positively as evidenced by the GDP growth and job creation after all meaningful tax cuts. Harding knew it, JFK knew it, Reagan knew it, as did Bush 2. There are four major components to GDP, figure out which one contributes the most and what more spendable income does to that component.

    Sorry, but my comment does address yours

    Follow the money. Where did the proceeds of the tax cuts flow?
    since you believe that the Bush tax cuts weren't spent properly thus causing the housing bubble or aren't "proceeds of the tax cuts" spending. If people don't spend their money wisely whose responsibility is it to assure that they do? Are you so superior that you should determine where people spend their money or be there to protect them when they make bad choices?

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    Tax cuts leads to more spendable income and that affects economic activity positively as evidenced by the GDP growth and job creation after all meaningful tax cuts.
    Depends on how much of that "spendable" income is actually spent. If it is used to pay down debt, it facilitates a contraction in the money supply. If it is spent on durable good consumption, the argument can be made that it positively impacts GDP in sustainable terms.

    Harding knew it, JFK knew it, Reagan knew it, as did Bush 2. There are four major components to GDP, figure out which one contributes the most and what more spendable income does to that component.
    What causes people to actually want to spend: A tax cut or an increase in income? The two are not the same. People spend more money when they believe they are making more money.

    Sorry, but my comment does address yours
    Nope. I made no mention about telling citizens what to do with their money.



    since you believe that the Bush tax cuts weren't spent properly thus causing the housing bubble or aren't "proceeds of the tax cuts" spending. If people don't spend their money wisely whose responsibility is it to assure that they do? Are you so superior that you should determine where people spend their money or be there to protect them when they make bad choices?
    I am not here to make qualitative statements. There are two types of economics: positive and normative. Normative economics involves how things "should be". Your posts in such topics are normative. Positive economics involves how things "are". My posts are driven by positive economic analysis. That my analysis does not lend support to your ideological desire in now way invalidates the point(s).

    You want tax cuts to be a major contributor to economic stimuli, ceteris paribus. The only problem is, ceteris paribus is a classroom assumption. Therefore, multiple factors are likely to contribute to a dynamic environment where results are not so black or white.
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Kushinator;1062064958]Depends on how much of that "spendable" income is actually spent. If it is used to pay down debt, it facilitates a contraction in the money supply. If it is spent on durable good consumption, the argument can be made that it positively impacts GDP in sustainable terms.
    Whatever is spent is more than would be normal without the tax cut and regardless of what they do with it, it benefits the economy. saving money puts more money in the banks to lend, paying down debt puts more money into the hands of the business, spending it we already know what happens, investing it helps business grow. You seem to base your entire argument that people make poor choices and somehow that needs to be regulated or controlled. The govt. isn't a parent so stop trying to delegate that responsibility to the govt.



    What causes people to actually want to spend: A tax cut or an increase in income? The two are not the same. People spend more money when they believe they are making more money.
    A tax rate cut and a pay raise both cause people to spend, always will, but a raise also means higher taxes. People look at their paycheck and see an amount. When the withholding is less the check amount is more.



    Nope. I made no mention about telling citizens what to do with their money.
    Then what did you mean by the proceeds of the tax cuts causing the real estate prices to rise? Do you understand supply and demand? The bad choices people made should not have led to any kind of bailout, business or individual.


    I am not here to make qualitative statements. There are two types of economics: positive and normative. Normative economics involves how things "should be". Your posts in such topics are normative. Positive economics involves how things "are". My posts are driven by positive economic analysis. That my analysis does not lend support to your ideological desire in now way invalidates the point(s).

    You want tax cuts to be a major contributor to economic stimuli, ceteris paribus. The only problem is, ceteris paribus is a classroom assumption. Therefore, multiple factors are likely to contribute to a dynamic environment where results are not so black or white.
    Sorry, but your opinion is based upon textbooks not personal experience or interacting with actual people. I have a BS degree in business and ran a 200 million dollar a year business with over 1200 employees. Those people weren't numbers, they were individuals who reacted when they got a pay raise or a tax cut positively. Your book smarts does not negate street smarts because it is street smarts which drive economic behavior.

    Tax cuts are a major contributor to economic activity because the single biggest economic component is consumer spending. You really need to get out more with the common people and see how the other half live from the elite like you.

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    Whatever is spent is more than would be normal without the tax cut and regardless of what they do with it, it benefits the economy.
    Incorrect. Paying down debt is not the same as spending, and therefore does not generate economic expenditure.

    saving money puts more money in the banks to lend
    There is not a causative relationship between paying down debt and increased lending activity. If anything, the data shows otherwise. Saving money (that would have otherwise been spent) only diminishes GDP growth. This is simply a matter of fact.

    paying down debt puts more money into the hands of the business
    Large cash balances do not lead to job creation.

    spending it we already know what happens
    Depends. Do people purchase heavily inflated real estate? Or, do people purchase a new washer/dryer for their existing home?

    investing it helps business grow.
    Again, it depends.

    You seem to base your entire argument that people make poor choices and somehow that needs to be regulated or controlled. The govt. isn't a parent so stop trying to delegate that responsibility to the govt.
    I am making the argument that tax cuts do not necessarily lead to sustainable economic growth. The evidence supports my position.

    A tax rate cut and a pay raise both cause people to spend, always will
    Nope! It depends on the individuals consumption/saving propensity. Consumption generated by tax cuts is highest for low income individuals, or those who possess the least amount of liquid assets. The question then becomes; does the amount of consumption generated meet or exceed the income generated when the government makes purchases from the private sector, e.g. when it builds a new bridge or repairs an old one? Empirical research suggests otherwise.

    but a raise also means higher taxes.
    Bracket creep is a phenomenon that requires persistent inflation!

    People look at their paycheck and see an amount. When the withholding is less the check amount is more.
    Sure! But does that necessarily mean that the person will spend more? It depends on a plethora of other factors.

    Then what did you mean by the proceeds of the tax cuts causing the real estate prices to rise?
    Real estate prices increased rather dramatically following the Bush tax cuts. It turned into an asset bubble.

    Do you understand supply and demand?
    Of course. However, housing price gains outpaced the growth of income 5:1.

    The bad choices people made should not have led to any kind of bailout, business or individual.
    Bad choices made by the few cannot be allowed to spillover into the lives of the many. People have still yet to recover (in terms of purchasing power) wealth declines from the great recession.






    Sorry, but your opinion is based upon textbooks not personal experience or interacting with actual people. I have a BS degree in business and ran a 200 million dollar a year business with over 1200 employees. Those people weren't numbers, they were individuals who reacted when they got a pay raise or a tax cut positively. Your book smarts does not negate street smarts because it is street smarts which drive economic behavior.

    Tax cuts are a major contributor to economic activity because the single biggest economic component is consumer spending. You really need to get out more with the common people and see how the other half live from the elite like you.[/QUOTE]
    It is not very unreasonable that the rich should contribute to the public expense, not only in proportion to their revenue, but something more than in that proportion.
    "Wealth of Nations," Book V, Chapter II, Part II, Article I, pg.911

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Quote Originally Posted by Conservative View Post
    Wow, how typical, you believe human nature is going to be the same regardless of the taxes. Very few economists consider human behavior in their analysis and it is human behavior that drives the number one component of GDP which affects govt. revenue. It isn't tax cuts that cause deficits it is spending. Learn that and you will have more credibility.
    Nice regurgitation of the Con mantra. You have done Rupert Murdoch proud. And what studies have you seen that support such a contention (link please)? None... I thought so. I'm not going to let you make unsupported statements and that is one.

    The budgets were nicely balanced to running modest deficits before the tax cuts (contrary to your contention, we were not outspending income by 1/2 Trillion before tax cuts) However, after tax cuts, somehow we thought it advisable to THEN step up spending, starting a war and running two occupations and expanding Medicare Part D. Perhaps the evidence suggests cutting taxes leads to increased spending?

    Support your statements and maybe you will have some credibility.

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    Re: U.S. Adds 195,000 Jobs; Unemployment Remains 7.6%

    Kushinator;1062065482]Incorrect. Paying down debt is not the same as spending, and therefore does not generate economic expenditure.

    Where exactly does that go, out of circulation?


    There is not a causative relationship between paying down debt and increased lending activity. If anything, the data shows otherwise. Saving money (that would have otherwise been spent) only diminishes GDP growth. This is simply a matter of fact.
    Where does that money go and where do banks or businesses get the money to lend? Your data tells you only part of the story. Again, you obviously are very book smart but you really need to get out more. Business investment is part of a GDP Component.

    Large cash balances do not lead to job creation.
    Who said they did? What is preventing businesses from spending that money now is Obama and his economic policy. If you had a business would you spend excess cash now? Have you ever hired an employee? Any idea as to the costs of hiring and yes, firing?


    Depends. Do people purchase heavily inflated real estate? Or, do people purchase a new washer/dryer for their existing home?
    Either way it is personal choice. Do you have a problem with personal choice? Any spending helps the economy and has a ripple effect

    Again, it depends.
    Where does investment capital go?

    I am making the argument that tax cuts do not necessarily lead to sustainable economic growth. The evidence supports my position.
    Your opinion noted, not necessarily leaves room for a difference of opinion and different outcome. A tax cut that was implemented in July 2003 isn't going to be effecting in July 2013. It needs to be reinforced along with positive economic policies

    Nope! It depends on the individuals consumption/saving propensity. Consumption generated by tax cuts is highest for low income individuals, or those who possess the least amount of liquid assets. The question then becomes; does the amount of consumption generated meet or exceed the income generated when the government makes purchases from the private sector, e.g. when it builds a new bridge or repairs an old one? Empirical research suggests otherwise.
    Again, you have no idea what people do with their money but the textbooks tell you that tax cuts generates the highest consumption by low income people many of whom pay no net FIT. Govt doesn't invest, it spends. There is no requirement for a return on that investment and the record shows we have an almost 17 trillion dollar debt today because of that govt. spending and lack of revenue due to poor economic policies. You see people cannot print money and aren't going to spend based upon uncertainty or poor consumer confidence

    Bracket creep is a phenomenon that requires persistent inflation!
    Thus the need for a flat tax

    Sure! But does that necessarily mean that the person will spend more? It depends on a plethora of other factors.
    People with more spendable income need less of that so called govt. help. I prefer people having the money vs. the govt. taking it and wasting it on social engineering.


    Real estate prices increased rather dramatically following the Bush tax cuts. It turned into an asset bubble.
    You don't seem to understand why. The free market is always going to create bubbles, how those bubbles are handled is what matters. This Govt. hasn't done a good job handling bubbles.

    Of course. However, housing price gains outpaced the growth of income 5:1.
    Yes, and what is your solution, control of the cash? So what that housing price gains outpaced the growth of income. Seems the market will correct itself.

    Bad choices made by the few cannot be allowed to spillover into the lives of the many. People have still yet to recover (in terms of purchasing power) wealth declines from the great recession.

    Enough social engineering and govt. micromanaging the private sector economy. The govt trying to legislate equal outcome and not equal opportunity is what causes the problems we have today. Promoting individual wealth creation is what made this country great, demonizing it destroys it

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