Supply-side VS. Keynesian economics

[whateverdude]

I'm not going to sit here and pretend to know the ins and outs of each economic theory but on a surface level can we agree that Obama's Keynesian stimulus has failed big time and it's time to give supply-side a go. Keynesian didn't work in the 70's and is not working now.

Edited August 31, 2010 by whateverdude

[Rob's House]

I'm not going to sit here and pretend to know the ins and outs of each economic theory but on a surface level can we agree that Obama's Keynesian stimulus has failed big time and it's time to give supply-side a go. Keynesian didn't work in the 70's and is not working now.

 

It didn't work in the 30s either.

[PastaJoe]

it's time to give supply-side a go.

 

You mean the policy where we give tax breaks to the wealthy, and they invest it in businesses who then create jobs for the middle class? Like the Bush tax cuts that have been in effect while this economic downturn has occurred? Like the deregulation of financial institutions that caused much of this problem? Like businesses having huge cash reserves like they have now, that they'll use to expand and create new jobs? No thanks, we've been trickled on enough by the panacea of hoping the wealthy will sprinkle some crumbs our way if we only keep lowering their taxes.

[drnykterstein]

I'm not going to sit here and pretend to know the ins and outs of each economic theory but on a surface level can we agree that Obama's Keynesian stimulus has failed big time and it's time to give supply-side a go. Keynesian didn't work in the 70's and is not working now.

Was GW Bush the supply-side guy? Did his policies succeed?

 

 

Edit: For the record, I disagree that Obama has followed Keynesian economics with any good degree of loyalty. If he did the stimulus should have been twice as large, as many economists recommended.

Edited August 31, 2010 by conner

[Magox]

You mean the policy where we give tax breaks to the wealthy, and they invest it in businesses who then create jobs for the middle class? Like the Bush tax cuts that have been in effect while this economic downturn has occurred? Like the deregulation of financial institutions that caused much of this problem? Like businesses having huge cash reserves like they have now, that they'll use to expand and create new jobs? No thanks, we've been trickled on enough by the panacea of hoping the wealthy will sprinkle some crumbs our way if we only keep lowering their taxes.

Why do you say tax breaks for the wealthy? You do know that the Bush Tax cuts were for everyone right? Also, did you know that 48% of the US population after tax deductions don't pay anything in income taxes?

 

Also, do you really believe it was the deregulation of financial institutions that caused "much of this problem"? That sort of bull **** may work with the ignorant and the lemmings but it doesn't fly with me, and I can assure you that I can go circles around you when it comes to the economy... I'll tell you where the "problem" originated, I'll give you a hint, mortgages and underwriting...

 

Another thing, what does the Bush Tax cuts have to do with the economic downturn? You referenced it, so enlighten us please, I would love to hear your answer.

 

Yes, businesses do have huge cash reserves, so why aren't they hiring Pasta? Please give us your spin.

I mean, afterall we have spent $800 Billion with interest rates at near 0% with over $1.5 Trillion in Q.E

 

This afterall is keynesian economics on steroids and corporations are flushed with cash. So why aren't they spending? Why is this economy faltering again?

 

 

 

 

Edit: For the record, I disagree that Obama has followed Keynesian economics with any good degree of loyalty. If he did the stimulus should have been twice as large, as many economists recommended.

Polly want a cracker?

[Rob's House]

You mean the policy where we give tax breaks to the wealthy, and they invest it in businesses who then create jobs for the middle class? Like the Bush tax cuts that have been in effect while this economic downturn has occurred? Like the deregulation of financial institutions that caused much of this problem? Like businesses having huge cash reserves like they have now, that they'll use to expand and create new jobs? No thanks, we've been trickled on enough by the panacea of hoping the wealthy will sprinkle some crumbs our way if we only keep lowering their taxes.

 

So you're attributing the financial meltdown to the Bush tax cuts? And no mention of the ever increasing price of fairy dust?

 

Tell me this, seriously. How do you guys talk about a financial crisis that started with a domino effect of defaulting subprime mortgages and completely discount any effect that government sponsored entities THAT WERE RESPONSIBLE FOR ROUGHLY ONE !@#$ING THIRD OF ALL SUBPRIME MORTGAGES? Nothing? They don't get a mention? Care to explain that one bright boy?

 

Do you have any interest in the truth or are you just a !@#$ing hack?

Edited August 31, 2010 by Rob's House

[RkFast]

You mean the policy where we give tax breaks to the wealthy, and they invest it in businesses who then create jobs for the middle class? Like the Bush tax cuts that have been in effect while this economic downturn has occurred? Like the deregulation of financial institutions that caused much of this problem? Like businesses having huge cash reserves like they have now, that they'll use to expand and create new jobs? No thanks, we've been trickled on enough by the panacea of hoping the wealthy will sprinkle some crumbs our way if we only keep lowering their taxes.

 

BINGO, and there it is!

 

Tell us, Joe...tell us how "BADDDDD" it is that Companies are holding on to their cash. Tell us how eeeeeevilllllll they are for doing that.

 

You KNOW you want to.

[Alaska Darin]

Why do you say tax breaks for the wealthy? You do know that the Bush Tax cuts were for everyone right? Also, did you know that 48% of the US population after tax deductions don't pay anything in income taxes?

 

Also, do you really believe it was the deregulation of financial institutions that caused "much of this problem"? That sort of bull **** may work with the ignorant and the lemmings but it doesn't fly with me, and I can assure you that I can go circles around you when it comes to the economy... I'll tell you where the "problem" originated, I'll give you a hint, mortgages and underwriting...

 

Another thing, what does the Bush Tax cuts have to do with the economic downturn? You referenced it, so enlighten us please, I would love to hear your answer.

 

Yes, businesses do have huge cash reserves, so why aren't they hiring Pasta? Please give us your spin.

I mean, afterall we have spent $800 Billion with interest rates at near 0% with over $1.5 Trillion in Q.E

 

This afterall is keynesian economics on steroids and corporations are flushed with cash. So why aren't they spending? Why is this economy faltering again?

Joe isn't going to respond with anything because his "knowledge" of anything because he doesn't have any. He simply regurgitates whatever the left wing flavor of the day is.

 

I saw a political ad yesterday where the Dummycrat candidate blamed the Republican for voting for the stimulus. That's for people like Joe, who only hate things that the other party does but lauds the same actions like a trained monkey when his master is doing them.

[IDBillzFan]

No thanks, we've been trickled on enough by the panacea of hoping the wealthy will sprinkle some crumbs our way if we only keep lowering their taxes.

I'm with you. I think we need to give more time to the Barack Obama Trickle Up Poverty Plan. We're only two years in. It needs more time.

[OCinBuffalo]

Was GW Bush the supply-side guy? Did his policies succeed?

No he wasn't. As we have heard a thousand million times, he was a Neo-con. The Republican Congress stopped being supply siders around 1998, and Pelosi's Congress did nothing for the first 2 years, and has made things worse the last 2.

 

We have already established that you don't know economics on any level. I am willing to teach if you are willing to learn.

 

Sound, actual supply side policy implemented in 2007-8 would have averted much of this. Unfortunately we had a government that was overwhelmed with the wars, and losing the ability to govern.

Edit: For the record, I disagree that Obama has followed Keynesian economics with any good degree of loyalty. If he did the stimulus should have been twice as large, as many economists recommended.

More evidence that you simply aren't familiar with Keynesian economics. "Degree of loyalty"? That is what somebody who has no concept of the subject matter being discussed says in a meeting so as not to look completely clueless. Conner, you appear to be that dopey, foppish middle manager we all know...

 

Since we are talking in terms of "degrees of loyalty", please define which macroeconomic policies represent a high, medium and low degree of loyalty in terms of Keynesian economics.

Edited August 31, 2010 by OCinBuffalo

[Dave_In_Norfolk]

It didn't work in the 30s either.

Did it work in the 40's?

 

I'm not going to sit here and pretend to know the ins and outs of each economic theory but on a surface level can we agree that Obama's Keynesian stimulus has failed big time and it's time to give supply-side a go. Keynesian didn't work in the 70's and is not working now.

Just for fun, I'll argue that these two systems are almost identical

 

 

a) Supply Side= pump money into the economy with tax cuts and borrowed money like Reagan

 

b) Keynesian=Borrowing money and using it to invest, build and directly create jobs

[3rdnlng]

Did it work in the 40's?

 

 

Just for fun, I'll argue that these two systems are almost identical

 

 

a) Supply Side= pump money into the economy with tax cuts and borrowed money like Reagan

 

b) Keynesian=Borrowing money and using it to invest, build and directly create jobs

 

It doesn't work at all.

[Dave_In_Norfolk]

It doesn't work at all.

Oh, so massive government spending on the war didn't usher in prosperity in the 40's?

 

Facts

[Magox]

Did it work in the 40's?

Ok, I would say that you are making an intellectually dishonest argument, but I'm not quite sure that in your instance it fits the bill.

 

Most economists would agree that the 40's expansion was due to WWII and not the "Public Works Program".

[OCinBuffalo]

Did it work in the 40's?

No. FDR was forced to get rid of his favorite government worker programs, which never created economic growth, to free up workers for businesses, which did create massive growth. In it's effect, WWII forced the ultimate supply side economic policies. You had the government acting as a customer, and not a competitor, of business.

 

So, no, it never worked. Anybody who says different is not a historian. Instead, they are probably a hack, or a Paul Krugman type who will cherry pick a few facts and leave out most of the actual history in a lame attempt to make an economically sound, but historically ignorant, point.

 

Every time government competes with business it weakens the economy and destroys both economic growth and technological progress.

 

You would think that people who like to call themselves "progressives" wouldn't be for things that kill progress.

[3rdnlng]

Oh, so massive government spending on the war didn't usher in prosperity in the 40's?

 

Facts

 

Well I will admit that it did cut the unemployment rate, so maybe we should start something up with China.

[OCinBuffalo]

Did it work in the 40's?

 

 

Just for fun, I'll argue that these two systems are almost identical

 

 

a) Supply Side= pump money into the economy with tax cuts and borrowed money like Reagan

 

b) Keynesian=Borrowing money and using it to invest, build and directly create jobs

What exactly is "fun" about spreading ignorance?

 

Wait, this is like saying a trap that I am going to fall into is both big and little at the same time, isn't it.

[Magox]

Just for fun, I'll argue that these two systems are almost identical

 

 

a) Supply Side= pump money into the economy with tax cuts and borrowed money like Reagan

 

b) Keynesian=Borrowing money and using it to invest, build and directly create jobs

There is a fundamental difference.

 

The question is, if the government were to give you a $1000 tax cut as opposed to the government increasing your taxes by $1000, who will most likely spend it more efficiently, you or the government?

 

Corporations in many cases prove that they can spend their money in a much more stimulative manner than the government, so I am completely on the supply side of economics. However, it is dishonest to say that tax cuts pay for themselves. Tax cuts do promote more growth but they also can add to deficits as well. There has to be a limit, and in my opinion as I've stated before, I believe all the Bush Tax cuts should expire, including those for the "middle class". I do believe they should be offset with corporate and small business tax cuts, PERMANENTLY, to stimulate sustained job growth.

 

The deficit poses too much of a risk and even though we can borrow money cheaply that can change very suddenly. The argument that Krugman makes is ridiculous, he basically cites that these low interest rates are proof that we are not in any danger of having a sovereign default crisis. If you look at bond yields from Greece and Spain just a couple months before their crisis, you will see that they were getting very low rates, so according to Krugmans analysis, this would of shown that they weren't in any imminent danger of default. I'm surprised no one has really hammered him on this point.

 

 

It's the old saying, Everything is ok until it isn't. Same can be said for the housing market, the tech bubble or just about any market bubble that popped, everything appeared to be ok until it wasn't. All one has to do is look at our current fiscal situation, and the structural issues we face to realize that we are in deep **** unless something happens NOW. Unfortunately the GOP will continue to push the Bush Tax cuts pretending that it doesn't add to the deficit and the liberals will continue to want to spend AND continue the Bush Tax cuts for the "Middle class".

 

Just in case any of you leftist lemmings want to know, the Bush tax cuts is suppose to add $200 Billion to the national debt for 2011, the tax cuts for the "wealthy" make up $40 Billion out of the $200 Billion. So please, don't embarrass yourselves any further with this argument that it's the tax cuts for the "wealthy" that is the major cost of the Bush Tax cuts, which only make up 20% of the tax cuts.

[OCinBuffalo]

There is a fundamental difference.

 

The question is, if the government were to give you a $1000 tax cut as opposed to the government increasing your taxes by $1000, who will most likely spend it more efficiently, you or the government?

 

Corporations in many cases prove that they can spend their money in a much more stimulative manner than the government, so I am completely on the supply side of economics. However, it is dishonest to say that tax cuts pay for themselves. Tax cuts do promote more growth but they also can add to deficits as well. There has to be a limit, and in my opinion as I've stated before, I believe all the Bush Tax cuts should expire, including those for the "middle class". I do believe they should be offset with corporate and small business tax cuts, PERMANENTLY, to stimulate sustained job growth.

 

The deficit poses too much of a risk and even though we can borrow money cheaply that can change very suddenly. The argument that Krugman makes is ridiculous, he basically cites that these low interest rates are proof that we are not in any danger of having a sovereign default crisis. If you look at bond yields from Greece and Spain just a couple months before their crisis, you will see that they were getting very low rates, so according to Krugmans analysis, this would of shown that they weren't in any imminent danger of default. I'm surprised no one has really hammered him on this point.

 

 

It's the old saying, Everything is ok until it isn't. Same can be said for the housing market, the tech bubble or just about any market bubble that popped, everything appeared to be ok until it wasn't. All one has to do is look at our current fiscal situation, and the structural issues we face to realize that we are in deep **** unless something happens NOW. Unfortunately the GOP will continue to push the Bush Tax cuts pretending that it doesn't add to the deficit and the liberals will continue to want to spend AND continue the Bush Tax cuts for the "Middle class".

 

Just in case any of you leftist lemmings want to know, the Bush tax cuts is suppose to add $200 Billion to the national debt for 2011, the tax cuts for the "wealthy" make up $40 Billion out of the $200 Billion. So please, don't embarrass yourselves any further with this argument that it's the tax cuts for the "wealthy" that is the major cost of the Bush Tax cuts, which only make up 20% of the tax cuts.

See, I was gonna do this...but I figured why bother? Especially when Magox is around.

 

Edit: I think it's also important to note that only half the country pays any taxes to begin with. I would like to see us modify that. Everybody should be required to pay something, however small. We can't all be = under the law, if we don't all pay at least something in. Moreover, why do we want to create yet another division and source of resentment and feelings of inferiority? Every citizen should be able to feel that they are contributing to society. Creating special statuses is a stupid choice.

Edited August 31, 2010 by OCinBuffalo

[Rob's House]

Oh, so massive government spending on the war didn't usher in prosperity in the 40's?

 

Facts

That's just an incredibly stupid question. Massive spending didn't usher in squat. The end of the war, people going back to work with a sense of stablility, along with the government relaxint it's tight interventionist policies and the REDUCTION of the monetary expansionism you credit with this prosperity is precisely what led to it.

 

An economy is the net production of all goods and serices in a society. How does blowing up **** and passing around printed paper fiat money grow that? F-tard.

 

... However, it is dishonest to say that tax cuts pay for themselves. Tax cuts do promote more growth but they also can add to deficits as well. ...

 

You hit on a concept most liberals (and I suppose conservatives for that matter) don't understand about the "supply side" philosophy. The relationship between tax rate and tax revenue isn't linear but rather a bell curve, or in this case the Laffer Curve.

 

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

 

*Wiki links are not endorsed for accuracy of opinion and are simply provided to bring familiarity.