Where is the US economy headed?

Bull. The American people were heard. They elected representatives to go to Washington, and they voted for the authorization to use force. Cicerone, this country is not run by media polls or Hollywood, it is run by the government we elect, thankfully.

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okie, You can't look at historical debt levels and say we can work outselves of of this "one." Today's economy is not the same as the past; world competition is upon us, and that's not going to change any time soon. Americans are earning less with more debt. If you look at income potential during past periods of debt vs today's income potential, you'll see that more middle class families are falling into poverty - with increased debt. Big difference - whether you wish to acknowledge that or not.

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okie wrote:

As a portion of our economy or worth, the national debt doesn't appear to be radically worse now than ever.

http://en.wikipedia.org/wiki/Image:National_debt_as_a_%25_of_gdp.jpg

And when I said we could grow ourselves out of the hole or to a better postion, I advocate reducing spending growth vs increasing taxes.

The Laffer curve was debated extensively on another thread I started, and I think I won the debate, although the opponents would not admit it.

You may think you won the debate, but you conclusively lost. You were trounced. As one of your opponents, I guess it's necessary to remind you that you couldn't provide any actual evidence to support the Laffer curve; only repeat the theory over and over again. When shown evidence that it wasn't true, you discounted it but did not discredit it.

Do we need to go through it again? I'd be more than happy to do so. I will state for the record that the Laffer curve doesn't exist outside of theory and has no utility in setting nor predicting the effect of rates of taxation whatsoever. You cannot show that it does, as evidenced in the other thread.

I understand that there are ways of looking at the debt that show our economy has risen as well; but the debt never, ever, ever, ever goes away, no matter how good or bad our economy is doing. That's the problem with the idea of 'growing out' of debt; you can't grow indefinitely, and surely not higher than the rate of interest payments. Your debt on the other hand most certainly does grow indefinately.

I'm sure that a fair and valid position on cutting spending to reduce the debt that we have includes major cuts to military spending, our number on budget item. Correct?

Cycloptichorn

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okie, Congress authorized the use of force after this administration provided lies about WMDs. After no WMDs were found, this admnistration changed their justification for the war from WMDs to get rid of Saddam and bring democracy to the Middle East.

Elections does not a democracy make. Can you spell "civil war?"

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Only an absolute mathematical idiot would deny the Laffer curve. If tax rates are 0, you take in no tax money, and if it is 100%, you take in very little, and in the middle you take in more. You draw the curve, cyclops, if you are capable of simple thinking. This argument absolutely befuddles me because it is so simple. I am not asserting the curve looks exactly as Laffer drew it on a napkin, but neither did Laffer. The general concept has to be true, and all we need to argue about is where the peak is.

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cicerone imposter wrote:

okie, Congress authorized the use of force after this administration provided lies about WMDs. After no WMDs were found, this admnistration changed their justification for the war from WMDs to get rid of Saddam and bring democracy to the Middle East.

Elections does not a democracy make. Can you spell "civil war?"

Cicerone, even Hillary says she personally talked to intelligence people to find out if Bush was misleading her, and she agreed with Bush. Do we have to re-plow this ridiculous field of controversy over and over. We will just need to agree to disagree.

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okie wrote:

Only an absolute mathematical idiot would deny the Laffer curve. If tax rates are 0, you take in no tax money, and if it is 100%, you take in very little, and in the middle you take in more. You draw the curve, cyclops, if you are capable of simple thinking. This argument absolutely befuddles me because it is so simple. I am not asserting the curve looks exactly as Laffer drew it on a napkin, but neither did Laffer. The general concept has to be true, and all we need to argue about is where the peak is.

I'm sorry, but you show your main error here:

Quote:

The general concept has to be true

No, it doesn't. This false assumption is coloring your whole argument.

This has been shown to you many times, but I'll do it again - if it's necessary.

The secondary error - after assuming something MUST be true, but failing to actually have any real-world evidence to back it up - is in assuming that this non-existent curve tells us anything at all about the real world situation we find ourselves in.

Now, my earlier question: I'm sure that a fair and valid position on cutting spending to reduce the debt that we have includes major cuts to military spending, our number one budget item. Correct?

Cycloptichorn

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okie, How interesting that Hillary talked to the intel people, but failed to share that info with her democratic colleagues.

Here's first hand info from a CIA agent (reported by CBS News):

Drumheller was the CIA's top man in Europe, the head of covert operations there, until he retired a year ago. He says he saw firsthand how the White House promoted intelligence it liked and ignored intelligence it didn't:

"The idea of going after Iraq was U.S. policy. It was going to happen one way or the other," says Drumheller.

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From the same CBS News report:

Meanwhile, the CIA had made a major intelligence breakthrough on Iraq's nuclear program. Naji Sabri, Iraq's foreign minister, had made a deal to reveal Iraq's military secrets to the CIA. Drumheller was in charge of the operation.

"This was a very high inner circle of Saddam Hussein. Someone who would know what he was talking about," Drumheller says.

"You knew you could trust this guy?" Bradley asked.

"We continued to validate him the whole way through," Drumheller replied.

According to Drumheller, CIA Director George Tenet delivered the news about the Iraqi foreign minister at a high-level meeting at the White House, including the president, the vice president and Secretary of State Rice.

At that meeting, Drumheller says, "They were enthusiastic because they said, they were excited that we had a high-level penetration of Iraqis."

What did this high-level source tell him?

"He told us that they had no active weapons of mass destruction program," says Drumheller.

"So in the fall of 2002, before going to war, we had it on good authority from a source within Saddam's inner circle that he didn't have an active program for weapons of mass destruction?" Bradley asked.

"Yes," Drumheller replied. He says there was doubt in his mind at all.

"It directly contradicts, though, what the president and his staff were telling us," Bradley remarked.

"The policy was set," Drumheller says. "The war in Iraq was coming. And they were looking for intelligence to fit into the policy, to justify the policy."

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Cycloptichorn wrote:

okie wrote:
Only an absolute mathematical idiot would deny the Laffer curve. If tax rates are 0, you take in no tax money, and if it is 100%, you take in very little, and in the middle you take in more. You draw the curve, cyclops, if you are capable of simple thinking. This argument absolutely befuddles me because it is so simple. I am not asserting the curve looks exactly as Laffer drew it on a napkin, but neither did Laffer. The general concept has to be true, and all we need to argue about is where the peak is.

I'm sorry, but you show your main error here:

Quote:
The general concept has to be true

No, it doesn't. This false assumption is coloring your whole argument.

This has been shown to you many times, but I'll do it again - if it's necessary.

The secondary error - after assuming something MUST be true, but failing to actually have any real-world evidence to back it up - is in assuming that this non-existent curve tells us anything at all about the real world situation we find ourselves in.

Now, my earlier question: I'm sure that a fair and valid position on cutting spending to reduce the debt that we have includes major cuts to military spending, our number one budget item. Correct?

Cycloptichorn

Okay, let us see if we can solve this once and for all.
How much tax is collected if the tax rate was 0%. Do not use the argument that there is no real world example. We don't need any. There is none because all governments realize they would take in no money, so the answer is what, cyclops? If you need a clue as to how to solve the equation, multiply any number by 0 and see what you get.

Now, what tax revenues result from a 100% tax of an economy does take a little bit of thinking and estimation, a little more than the first question, but not much more. There are pretty solid real world examples of what happens to an economy when a government allows no direct rewards to people according to how hard they work. A hint to this would be to check out what the gdp of North Korea is to South Korea, then compare the revenues extracted from the economy of North Korea to South Korea, and look at the tax rate of South Korea and the essential revenue extraction rate of North Korea, which would be roughly equatable to the tax revenues for South Korea. In very approximate terms as applied to a Laffer curve for any country, how does 50% of 100% compare with 100% of 10%? Are they even close? Is this even debatable?

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Quote:

Do not use the argument that there is no real world example. We don't need any.

WRONG! If you purport to use a theory to explain and predict real-world situations, you'd better damn well have real-world examples.

Otherwise, I'm sure you would agree that all the AGW theories are sound and built on good science. You are essentially arguing their side of the theory, but in economic terms.

My contention has never been that you couldn't do some math to come up with some numbers, Okie; it has been that this math and these numbers bear no relation to real life whatsoever, and are not useful at all in predicting or planning tax policy.

Cycloptichorn

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okie wrote: How much tax is collected if the tax rate was 0%.

okie et al will never see the ridiculous statements they post that are not only ignorant, but removed from total reality. Where does these people come from?

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Has anyone ever claimed it was feasible? You guys are hilarious.

Try this question. How much does somebody make if they work for free, or $0.00 per hour pay rate? After 8 hours, how much does that person make in wages? Try the math. It isn't that hard.

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okie wrote:

Has anyone ever claimed it was feasible? You guys are hilarious.

Claimed what was feasible?

Using the laffer curve to predict taxation rates and their effects? That's your claim, right?

Quote:

Try this question. How much does somebody make if they work for free, or $0.00 per hour pay rate? After 8 hours, how much does that person make in wages? Try the math. It isn't that hard.

As I said above - which you refuse to acknowledge - it isn't that the math is hard, it is that the math has no utility nor resemblance to the actual economic situation in question, no matter what set of numbers you choose to use in your example.

Cycloptichorn

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Cycloptichorn wrote:

okie wrote:
Has anyone ever claimed it was feasible? You guys are hilarious.

Claimed what was feasible?

You are playing dumb now. 0% tax rate is the "what."

Quote:

Using the laffer curve to predict taxation rates and their effects? That's your claim, right?

Cycloptichorn

It is my claim that a curve exists with a peak tax revenue somewhere between 0% and 100% tax rate. I do not believe Laffer drew the curve to assert what exact shape or at what number the peak existed at, only that a curve existed in the general shape drawn. If people would get over their stupidity over such a simple concept, then perhaps we could intelligently argue about what the curve more exactly looked like at any particular point in time. I doubt we could ever agree on the details, but it would be far better than disagreeing over a general concept that is pretty much obvious to anyone with a brain.

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okie wrote:

Cycloptichorn wrote:
okie wrote:
Has anyone ever claimed it was feasible? You guys are hilarious.

Claimed what was feasible?

You are playing dumb now. 0% tax rate is the "what."

Quote:
Using the laffer curve to predict taxation rates and their effects? That's your claim, right?

Cycloptichorn

It is my claim that a curve exists with a peak tax revenue somewhere between 0% and 100% tax rate. I do not believe Laffer drew the curve to assert what exact shape or at what number the peak existed at, only that a curve existed in the general shape drawn. If people would get over their stupidity over such a simple concept, then perhaps we could intelligently argue about what the curve more exactly looked like at any particular point in time.

Noone has ever claimed that the concept that you've described doesn't work neatly in theoretical terms - just that it has nothing to do with actual economic conditions.

It has no use as either an explanatory tool nor a predictive one. It cannot be replicated using any data set or any historical data set. So what's the point of talking about it?

Here you say -

Quote:

perhaps we could intelligently argue about what the curve more exactly looked like at any particular point in time.

There is no intelligent discussion possible about 'what the curve looks like.' It doesn't 'look' like anything, and it doesn't change no matter what the real-world situation is. There is no way to provide any accurate data points to plug in and no way to model the actual effects of changing rates of taxation. It's a useless exercise.

You added this

[quoteI doubt we could ever agree on the details, but it would be far better than disagreeing over a general concept that is pretty much obvious to anyone with a brain.[/quote]

Tell me, why do no economists take this theory seriously? Why can't this theory be replicated by historical data sets? Why can't we use it as a predictive tool? Because the theory sucks, and it isn't the people who disagree with using it to discuss and explain taxation who are 'without a brain,' Okie.

Cycloptichorn

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Cycloptichorn wrote:

Noone has ever claimed that the concept that you've described doesn't work neatly in theoretical terms - just that it has nothing to do with actual economic conditions.

It has no use as either an explanatory tool nor a predictive one. It cannot be replicated using any data set or any historical data set. So what's the point of talking about it?

I think you are dead wrong. Politicians talk about this all the time, although in different terms. The debate rages, some predict lower revenues through lower tax rates while others predict higher revenues, and some predict lower revenues with higher rates while some predict higher. Some demonize Bush's tax rate cuts, while others praise it, obviously for different reasons and motivations, but behind it all is always how tax revenues are affected as one part of the issue. It isn't called the Laffer curve, but that is the concept this is all dealing with. Nobody is claiming the peak tax revenue point on the curve is established for sure, and nobody that I know of claims that point is static through time. The big point I am asserting here that if everyone would acknowledge the obvious, that a curve does exist, then we could all get on the same page and go to the next step, and argue over what is the optimum tax rate for both government and the economy, and us, the citizens, at any particular time.

It seems to me that politicians should graduate from kindergarten and openly admit to some simple principles, and this should be one of them.

Quote:

Here you say -

Quote:
perhaps we could intelligently argue about what the curve more exactly looked like at any particular point in time.

There is no intelligent discussion possible about 'what the curve looks like.' It doesn't 'look' like anything, and it doesn't change no matter what the real-world situation is. There is no way to provide any accurate data points to plug in and no way to model the actual effects of changing rates of taxation. It's a useless exercise.

You added this

Quote:
I doubt we could ever agree on the details, but it would be far better than disagreeing over a general concept that is pretty much obvious to anyone with a brain.

Tell me, why do no economists take this theory seriously? Why can't this theory be replicated by historical data sets? Why can't we use it as a predictive tool? Because the theory sucks, and it isn't the people who disagree with using it to discuss and explain taxation who are 'without a brain,' Okie.

Cycloptichorn

The theory does not suck, and I would say that you are dead wrong when you say no economist takes the theory seriously. They may not call it the Laffer curve, but I would think any serious economist must take very seriously how tax rates may affect the economy, and ultimately tax revenues. If they do not, we are in bigger trouble than I ever thought possible. And you would then have to un-vindicate JFK's tax policies and Reagan's tax policies as well, which would not sit too well with the actual numbers.

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"Lower tax rates" never equals to "zero (0)" tax rate - not even in any discussions by the government or the public. They all understand (except some people) that talking about a zero tax rate is a waste of time.

Show us evidence where any government has talked about a zero tax rate?

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Okie,

Quote:

The big point I am asserting here that if everyone would acknowledge the obvious, that a curve does exist

IT IS NOT OBVIOUS that such a curve exists. Stop repeating that it is!

Here's an extremely simple explanation of why not: a curve exists when you have two axes, X - Y, and a set of data which falls in them either over time or other changing conditions. When you plot those points, you get a 'curve' or a set of data points which do not scale linearly but non-linearly according to various factors.

But, when it comes to taxation, it isn't just X-Y that affects revenue. There aren't just two axises to look at. It's more like X-Y-Z-A-7-G-H-I-O-3-F. There are hundreds of different factors which effect the level of revenue that a certain level of taxation will bring in, each requiring its' own axis of measurement. It becomes impossible to graph, let alone understand, and impossible to use as a model for discussion and prediction of actions.

You are attempting to posit a simple way of looking at a problem which is unbelievably complicated. The problem with this approach is it leads to super-overly-simplified answers which are flat-out wrong.

The whole point of keeping the Laffer curve out of economic discussions isn't to keep anyone down, it's because the curve isn't an economic model for predicting anything. It's an economic model for rationalizing giving more money to the rich, and that's it. It is a theory with no actual use in the real world.

Like I said earlier - you are taking the same position as the AGW people you claim to dislike, except in economic terms. They can show you well-designed models which also don't happen to add up to reality. In fact, remember the 'hockey stick?' Can you say, hello Laffer Curve?

Cycloptichorn

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Cycloptichorn wrote:

IT IS NOT OBVIOUS that such a curve exists. Stop repeating that it is!

Cycloptichorn

Well, we will just have to disagree. To say it does not exist is to assert the economy is static, no matter the tax rate, which I think is ridiculous. That is akin to saying the economy is static, no matter the interest rate, or no matter the price of oil, or no matter the inflation rate, or no matter lots of things.

Government has this arrogant and condescending attitude that they are above, or somehow apart from the rest of us that makes the economy what it is, and they can simply tax us at whatever rate they wish, and it has no effect on what we do and how hard we do it. And somehow they are exempt from the same principles that govern the economy. The fact is the government is a very big part of the economy, especially in terms of bleeding it, and to a smaller extent in providing things for us, such as police protection, defense, roads, and other things.

And like government, liberals have adopted a similar attitude, that tax rates, and whatever the government does is a world unto itself, apart from the realities of the free market, and it has no relationship whatever. Somehow, the root philosophy or idealistic view of the world places blinders on their mindset, so that they are unable to see reality for what it is. If you ever took calculus, you would understand that virtually every relationship can be defined by some kind of curve.

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Where is the US economy headed?

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