kalm wrote:
Good one
Here's the rest of the wiki paragraph:
According to a United States Department of the Treasury economic study,[29] the major tax bills enacted under Reagan, in the short-term, significantly reduced (~-1% of GDP) government tax receipts. Separated out, however, it is clear that the Economic Recovery Tax Act of 1981 was a massive (~-3% of GDP) decrease in revenues (the largest tax cuts ever enacted),[30] while other tax bills had neutral or, in the case of the Tax Equity and Fiscal Responsibility Act of 1982, significant (~+1% of GDP) government revenue-enhancing effects.
So can I claim that after the ERTA nearly bankrupted the country it was the Democratic congress that dragged Reagan "kicking and screaming" to the table?
Again, nice try, but you left off the last sentence of that paragraph (an accident I'm sure)...
It should be however noted that the study did not examine the longer-term impact of Reagan tax policy, including sunset clauses and "the long-run, fully-phased-in effect of the tax bills".[29] The table below represents only a 4-year average:
Oh that's right, Friedman was the wizard and Greenspan was the master of the universe.
Friedman was an interesting chap with some nice ideas. Unfortunately the complexity of modern economies and influences of globalization make it difficult to be conclusive about their successes and failures. As I've said before, I understand the attraction of neo-liberal/libertarian economic theories, I just think they are proving to be utopic and impracticle in the long run.
"interesting chap with some nice ideas..."
Friedman is the greatest economist of the 20th century. A Nobel Laureate (back when it actually meant something
). His consumption function analysis, his theories of monetary policy, and his permanent income hypothesis are classics. He has to be the most forward thinking revolutionary of his generation.
Here's an article about how Iceland fully embraced Friedmanism and the consequences:
It turns out that Iceland, despite its coalition governments and Nordic social values, became a poster child for neoconservative economic policies inspired by Milton Friedman during the past decade. Friedman himself visited Iceland in 1984 and participated in what was described as a "lively television debate" with leading Socialists. This inspired a generation of young conservatives who came to power through the Independence Party in 1991 and have run its government through different coalitions since then.
Friedman may be dead now, but the economic and financial collapse of 2008 is becoming a real-life battleground of his theories against those of the other giant of 20th century economics, John Maynard Keynes, and their respective followers. Will financial market bailouts put the economy back on track, or are more extensive reform and a more active role for the government needed?
riedman and his Chicago school of economics then very successfully spearheaded a reaction against Keynesianism, largely defining economic policy since the 1980s. The main policy prescriptions -- restricting the role of government, deregulation, privatization, cutting taxes, low inflation and the benefits of free markets -- were encapsulated in the "Washington consensus" and imposed with missionary zeal by IMF economists around the world.
While Friedman's narrow form of money supply monetarism was quickly abandoned in the early 1980s, most governments have relied primarily on monetary instead of fiscal policy for stabilization of their economies over the past few decades. This turned Alan Greenspan, former head of the U.S. Federal Reserve and an advocate of Friedman's policies, into the most important economic policy maker in the world. Although Greenspan was never elected, had no particular expertise in economics and was a disciple of the fringe ideology of libertarian Ayn Rand, he was able to use his considerable power to endorse tax cuts and deregulation. He is now widely considered to share the blame for creating the conditions that resulted in the current economic collapse.
First of all, no matter what that obscure radical left-wing author says, Iceland didn't "fully embrace" Friedman's theories. Friedman must have had the charisma of Mao, FDR, Obama, and Roy Rogers all rolled together if one visit back in the early to mid 80's caused such an upheaval.
Besides the first line of your quote shows that the author is totally clueless and is unable to grasp the subject at hand. Calling Friedman a neocon??? WOW!!!
According to the CBO for 2008 Medicare is 23%, Social Security is 21% and other mandatory spending is 10% of governement expenditures. So perhaps you're rounding up to two thirds? In any event, all federal mandatory expenditures represent 11.2 % of GDP. By comparison, health care is 16% and financial services are 28.8%
But in answer to your question, government spending can be the cause of deficits, but so can tax cuts. I'll remind you again that the budget was balanced not that long ago. So it depends on your philosophy.
Ummm...don't forget about the interest on the debt we are
obligated to pay. The budget was balanced. Mainly by curbing the rate of growth of the government...welfare reform and a booming (bubble) economy.
And the sour economy has many causes. But a country that is able to produce the immense wealth that we still have while "providing for the general welfare" as the founders suggested leads me to think we are still somewhere close to the middle but a little too much toward the right in my opinion.
You're entitled to your opinion, but if the left would have had it's way over the years, you wouldn't see the immense wealth OR opportunity we have here. The US would be more like continental Europe with its 50%+ tax rates and the government controlling 50%+ of the economy, not to mention the $8 a gallon gas, consistent "normal" unemployment rates standing at 12%-15%, etc...
Warren Buffet's secretary pays a higher tax rate than he does. The the top 1% of U.S. households owns 40% of the weatlh, more than the bottom 90% combined. CEO to janitor salary ratio's have risen from 40-1 to 400-1 over the last 30 years. Unless you're a CEO or in that top 1%, you should be as concerned with wealth redistribution as you are with deficit spending and tax rates.
Exactly, and that tells you how harmful and archaic our regressive tax system is. We tax people's income, we punish success and reward complacency and failure. It doesn't make sense.
