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
This was a Reagan like recession not even close to a depression.
It is and will continue to get worse because of Obama policies. The one thing you fail to see is the inflation during Reagan Obama does not have that so this recession is close to Reagan because of that.
Politifacts in order to show that this is worse than Reagan did not look at inflation.
Laffer: Obama's 'Train Wreck' Ahead - HUMAN EVENTS
Arthur Laffer, creator of the Laffer Curve that showed how low tax rates boost economic growth, is warning anyone who will listen that the economy is headed for a “train wreck” in 2011 that will make the current recession look tame by comparison.
The famed economist, whose supply-side, tax-cutting policies enacted by President Reagan in 1981 put the economy on a record-breaking, 25-year economic trajectory of growth and prosperity, is telling Americans not to be lulled by sporadic signs of growth this year, because the economy is headed for a sharper decline next year when tax rates are expected to jump sharply, sending the economy into a new tailspin.
“It will make the decline in U.S. output from 2010 to 2011 worse than the decline in output in 2008 and 2009 which will catastrophic,” Laffer said in an interview with HUMAN EVENTS.
In a wide-ranging discussion about where the economy is headed, and the fiscal, tax and monetary reasons why, Laffer gives a bleak forecast of where President Obama and his administration are taking the country in the next three years -- which he predicts will end with Obama’s defeat in 2012.
“Obama is a fine, very impressive person. He really is. Unfortunately, everything that he is doing in economics is exactly wrong. He is a crappy president,” Laffer said.
“Whenever a country is in the throes of spending too much and raising taxes, it’s a fiscal catastrophe in the making and this is what is happening now,” he said.
The economy in the short-term this year “will continue to improve, growing by more than 4 percent. By the end of 2010 the unemployment rate could fall to as low as 7 percent and the Obama administration will be busting with pride and conceit,” Laffer told his clients in his latest economic outlook for the year ahead.
But don’t be fooled into thinking the economy is actually coming out of one of the worst recessions of the post-war era, because this year will be a false recovery, he adds. The downturn will begin again when “2011 will enter center stage, followed quickly by an economic catastrophe. All the factors that will make 2010 (and have already made the last half of 2009) look so good will reverse direction, and 2011 will be a train wreck,” he said in his forecast.
The big reason, among several, is Obama’s plan to allow the Bush tax cuts to expire at the end of this year, and other tax increases the Obama administration intends to enact this year and next, and how businesses will respond to these tax changes.
“In anticipation of known tax increases the economy will shift income and output from 2011 -- the higher tax year -- into 2010 -- the lower tax year. As a result of this income shift, 2010 will look a lot better than it should, and 2011 will be a train wreck,” he predicts.
“GDP growth in 2010 will be some 3 to 4 percent higher than it otherwise should be, thus green shoots,” he said. “The transfer of income from 2011 into 2010 will not only make 2010 [economic growth] higher than it otherwise would be, it will also make 2011 [economic growth] 3 and 4 percent lower than it otherwise should be because people have shifted income out of 2011 into 2010.”
Last edited by The Prof; 02-16-10 at 05:29 PM.
EIGHTEEN PERCENT INFLATION!!!
these keynesians really have that POPULIST touch
But in the meantime more business would have gone under, from the banks to the auto industry (not just the big three but most of their suppliers as well.
This would have resulted in more unemployement then we have now, leading to more foresclosures on homes, and even more banks going under.
Overall there were two choices to be made. An extremely hard economic collapse, having massive unemployement, resulting in the loss of trillions of capital for everyone. This would last for about 3 years, but would have unemployment at levels higher then the great depression (and no unemployement/welfare programs to help people with). Followed by economic growth and it would be fairly rapid. The economic and social hardships would be difficult to describe in actual harshness, but lets just say strong potential for revolution. The second choice is what was choosen. To spread out the harm from the massive debt bubble over an extended period of time, and to spread it out to nearly everyone. This will last for at least 10 years, and economic growth will be muted for an extended period of time. 70's style stagflation is what should come to mind.
Last edited by Lord Tammerlain; 02-16-10 at 06:07 PM.