Page 9 of 10 FirstFirst ... 78910 LastLast
Results 81 to 90 of 94

Thread: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

  1. #81
    Sage

    Join Date
    Oct 2007
    Location
    New York
    Last Seen
    12-13-17 @ 12:40 PM
    Gender
    Lean
    Centrist
    Posts
    11,691

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by Conservative View Post
    A good combination of tax cuts and massive spending cuts is what is needed at this time.
    There's no way Washington will be able to find the political support to eliminate its fiscal imbalances strictly through spending reductions and also undertake the additional spending reductions required to finance tax relief. To get there, much of discretionary spending would need to be eliminated (including Defense spending) and/or the major entitlement programs would need to be dramatically reduced. That's highly unlikely. A combination of spending reductions (preferably the larger share of fiscal consolidation IMO) and tax increases will be needed. Early action could reduce the size of necessary revenue increases.

    If not we are still going to have high unemployment and puny economic growth. there are 16 million unemployed Americans today and no plan to get them back to work.
    A sizable component of the high unemployment rate is structural in nature. In the wake of the housing bubble, financial crisis, and steep recession, certain sectors (construction, financial services, etc.) are not likely to return to their former size (relative to GDP) anytime soon. Given labor market rigidities, including a employees skills/experience-job needs mismatch, slow job growth due to caution with respect to sluggish growth aggregate demand from continuing consumer deleveraging, a disjointed/fragmented employment services industry, educational attainment trends, etc., the unemployment rate is likely to remain several points higher than the bottoms following other recent recessions. There is no simple answer for structural unemployment.

  2. #82
    Sage
    Conservative's Avatar
    Join Date
    Dec 2009
    Location
    Houston, TX
    Last Seen
    Today @ 08:56 PM
    Gender
    Lean
    Conservative
    Posts
    67,293

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by donsutherland1 View Post
    Sorry, your post and mine crossed. In my reply (#78) to your earlier message, I noted:

    Reagan also confronted stagflation where a supply side remedy was useful.

    In contrast, in the current situation, the nation has witnessed a shock to aggregate demand. Its problem is not a matter of a lack of aggregate supply, hence supply side remedies are not the right medicine this time around.


    With respect to stagflation, a supply side remedy is useful. I agree that the tight money (Fed under Paul Volcker) and supply side fiscal policy (under President Reagan) was the right combination to address stagflation. However, the 2001 and 2007-09 recessions were the result of demand shocks resulting from the aftermath of the technology stocks bubble and then real estate bubble. Supply side remedies address a lack of supply relative to demand (entire curves). In the Reagan years, there was a need to shift the supply curve to the right. In the 2001 and 2007-09 recessions there was a need to the aggregate demand curve to the right. Different economic situations require different economic medicine.
    I reallly respect your opinion but I don't find any time suitable for a tax increase especially with this level of unemployment and debt. No tax increase is going to put people back to work and you cannot raise taxes enough without destroying the economy to pay off the debt. When the debt is this high, the unemployment this high, and the spending so great it is going to take better economic growth to grow us out of this mess and that can be created with tax cuts including eliminating the capital gains taxes. The problem is that will generate so much money for the govt. and Congress has shown no ability to tackle spending.

  3. #83
    Sage
    Conservative's Avatar
    Join Date
    Dec 2009
    Location
    Houston, TX
    Last Seen
    Today @ 08:56 PM
    Gender
    Lean
    Conservative
    Posts
    67,293

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by donsutherland1 View Post
    There's no way Washington will be able to find the political support to eliminate its fiscal imbalances strictly through spending reductions and also undertake the additional spending reductions required to finance tax relief. To get there, much of discretionary spending would need to be eliminated (including Defense spending) and/or the major entitlement programs would need to be dramatically reduced. That's highly unlikely. A combination of spending reductions (preferably the larger share of fiscal consolidation IMO) and tax increases will be needed. Early action could reduce the size of necessary revenue increases.

    A sizable component of the high unemployment rate is structural in nature. In the wake of the housing bubble, financial crisis, and steep recession, certain sectors (construction, financial services, etc.) are not likely to return to their former size (relative to GDP) anytime soon. Given labor market rigidities, including a employees skills/experience-job needs mismatch, slow job growth due to caution with respect to sluggish growth aggregate demand from continuing consumer deleveraging, a disjointed/fragmented employment services industry, educational attainment trends, etc., the unemployment rate is likely to remain several points higher than the bottoms following other recent recessions. There is no simple answer for structural unemployment.
    There in lies the problem,
    There's no way Washington will be able to find the political support to eliminate its fiscal imbalances strictly through spending reductions
    so why would anyone support tax increases under that scenerio. Let the people keep what they earn and become less dependent on the govt.

  4. #84
    Sage

    Join Date
    Oct 2007
    Location
    New York
    Last Seen
    12-13-17 @ 12:40 PM
    Gender
    Lean
    Centrist
    Posts
    11,691

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by Conservative View Post
    I reallly respect your opinion but I don't find any time suitable for a tax increase especially with this level of unemployment...
    As noted earlier, tax increases can't be implemented all at once. Realistically, most of the 2001 and 2003 tax relief will need to be renewed so as not to be economically disruptive. However, a gradual phasing in of tax hikes will need to take place in coming years if the nation is to pursue a credible fiscal consolidation strategy.

    No tax increase is going to put people back to work and you cannot raise taxes enough without destroying the economy to pay off the debt.
    That's part of the reason tax hikes cannot comprise the bulk of fiscal consolidation nor can they be implemented immediately. The unemployment rate will decline when firms have a better gauge of the growth curve in future aggregate demand (magnitude and sustainability). Temporary payroll tax relief will not materially alter that situation. Instead, risk-averse firms would likely pocket their tax savings to increase their bottom line. Until firms believe aggregate demand growth is sufficient and sustainable to justify expanding employment, they won't do so given the costs of adding employees.

    ...Congress has shown no ability to tackle spending.
    At present, Congress' reluctance to exercise fiscal discipline remains a prevalent bipartisan approach. A case in point was Congress' overwhelming waiving of very modest Medicare cost savings with respect to physician fees.

  5. #85
    Sage

    Join Date
    Oct 2007
    Location
    New York
    Last Seen
    12-13-17 @ 12:40 PM
    Gender
    Lean
    Centrist
    Posts
    11,691

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by Conservative View Post
    There in lies the problem, so why would anyone support tax increases under that scenerio. Let the people keep what they earn and become less dependent on the govt.
    I support tax increases as part of a comprehensive solution to address the nation's debt situation. The costs of modest increases in taxes will be small compared to those associated with a full-blown debt crisis.

  6. #86
    Sage
    Conservative's Avatar
    Join Date
    Dec 2009
    Location
    Houston, TX
    Last Seen
    Today @ 08:56 PM
    Gender
    Lean
    Conservative
    Posts
    67,293

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by donsutherland1 View Post
    I support tax increases as part of a comprehensive solution to address the nation's debt situation. The costs of modest increases in taxes will be small compared to those associated with a full-blown debt crisis.
    How many times has that been tried with Reagan and GHW Bush trying to reign in spending but politicians were more interested in keeping their job than they are in doing their job. First of all I am not convinced that tax increases mean more revenue to the govt. because when you raise taxes you change human behavior and that affects the economy as well as govt. revenue. The bigger issue is employment and until at least half the unemployed get back to work the focus should be on growing the economy and it is going to take tax cuts to do that. Tax increases IMO need to be put off until much later and as you stated cannot be implemented immediately. Let's see how tax cuts and spending cuts work.

  7. #87
    Professor

    Join Date
    Oct 2009
    Location
    North Dakota
    Last Seen
    09-02-17 @ 08:22 PM
    Gender
    Lean
    Conservative
    Posts
    2,357

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by Conservative View Post
    The bigger issue is employment and until at least half the unemployed get back to work the focus should be on growing the economy and it is going to take tax cuts to do that. Tax increases IMO need to be put off until much later and as you stated cannot be implemented immediately. Let's see how tax cuts and spending cuts work.
    This may fulfill your normative economic goals (a smaller government), but on the net tax cuts coupled with spending cuts will be contractionary (assuming the two are proportional in size).

  8. #88
    Sage
    Conservative's Avatar
    Join Date
    Dec 2009
    Location
    Houston, TX
    Last Seen
    Today @ 08:56 PM
    Gender
    Lean
    Conservative
    Posts
    67,293

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by drz-400 View Post
    This may fulfill your normative economic goals (a smaller government), but on the net tax cuts coupled with spending cuts will be contractionary (assuming the two are proportional in size).
    What if the tax rate cuts do what they always have done, grow govt. revenue and that money is left to the Politicians to spend?

  9. #89
    Professor

    Join Date
    Oct 2009
    Location
    North Dakota
    Last Seen
    09-02-17 @ 08:22 PM
    Gender
    Lean
    Conservative
    Posts
    2,357

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by Conservative View Post
    What if the tax rate cuts do what they always have done, grow govt. revenue and that money is left to the Politicians to spend?
    Well, then they would not be cutting spending.

  10. #90
    Sage
    Conservative's Avatar
    Join Date
    Dec 2009
    Location
    Houston, TX
    Last Seen
    Today @ 08:56 PM
    Gender
    Lean
    Conservative
    Posts
    67,293

    Re: Reagan Insider on how the GOP, and Dems Destroyed the U.S. Economy

    Quote Originally Posted by drz-400 View Post
    Well, then they would not be cutting spending.
    Of course they wouldn't and thus they would not be paying off the debt

Page 9 of 10 FirstFirst ... 78910 LastLast

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •