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That is not "merely" what the Laffer Curve is at all.
What claims does the Laffer Curve make or what insights does it offer that I've left out?
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Originally Posted by CaptainObvious
You've copied a definition (albeit loosely) of the Therorem. Great. That isn't debate.
It wasn't intended as debate. It was intended to illustrate that reference to high-falutin' sounding mathematical theorems is simply to add window-dressing (a la Creation Science) designed to make a bad proposition look good. Or at least somewhat better.
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Originally Posted by CaptainObvious
If you really want to get into the proof of the equation, we can.
One could start by simply stating the equation. That would put you one up on the ad hoc reasoning of Laffer that so impressed the Reaganites.
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Originally Posted by CaptainObvious
Otherwise, the rest of your argument should be copied and pasted over the the thread discussing how "not to win reasonable debate".
We can put it right after your comments on my 'Fleet is not so quick' quip.
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Originally Posted by CaptainObvious
Calling an economic law studied across the world in every major institution of higher learning "4th grade" would be one of those ways.
Many economic laws (if you want to call them that) are indeed taught around the world, and one of them is indeed the Law of Diminishing Returns. Laffer and his curve do not legitimately accrue status by leeching off of that.
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Originally Posted by CaptainObvious
Ok. I'd like to see it. "Quite easily" go ahead and show me that the Laffer Curve is an "empty redundancy". I am not sure I even know what that means-that is wasn't big words placed side by side to attempt to appear scholarly. Still, if it is quite easy, I am quite interested... Show me.
I'm surprised that you see 'empty' and 'redundancy' as being big words. The Laffer Curve meanwhile deals with the nature of variation in the area of a rectangle defined by P-times-Q where there is a relationship between P and Q defined by standard forms of elasticity. There is nothing new or unique either in the problem or in the overly-publicized claims for Laffer's having analyzed it. If there is anything positive at all to ascribe to Laffer, it is owed to the publicity, not the analysis, having encouraged fiscal policy types to focus on those elasticities (and hence on tax-base effects) more than they might have otherwise. That is the extent of it.
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Originally Posted by CaptainObvious
According to the entire theorem that is the Laffer Curve (and variants). That IS what we were discussing here. I conceded that it was indeed a difficult value to ascertain when I posted the comment "There are several ways to compute the curve, so several different computations of what the rate is that maximizes revenue, thus there is room for debate."
So you assert that the curve is difficult to construct and easy to debate, yet feel that your 50% figure is somehow made fixed and immutable by all of this. As before, I will suggest that you have swallowed some 'revealed economics' and that there is no defensible argument favoring 50% over any of a wide range of alternative values that themselves vary across time and place.
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Originally Posted by CaptainObvious
Again, your argument falls apart when you state "there are no actual data underlying the Laffer analysis at all." The whole of the argument falls apart now. It took a while, but now you're just throwing things out there. I've got an entire library of "actual" economic data applied to a whole host of economic equations...as would your local library, and even...the internet.
I'm simply stating the obvious. The Laffer Curve was built from a not particularly complex or revolutionary intuition. The existence of volumes worth of economic data does not alter the fact that none of them was used in his analysis. Since those days, credible people have tested the theory against the data, and lo and behold, it has never worked as advertised.
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Originally Posted by CaptainObvious
This is like trying to debate someone that doesn't think the sky is blue or that water is wet. I just can't even argue the last one. You like to assert things you don't understand. NO economists at all in the whole world (since you like such using such extreme limiting words throughout your argument) would say the Curve has been "debunked" and most definitely not "in spades".
Since I am an economist and have been for more than three decades and have just made that statement, your claim is another that is debunked. My credentials do not make me the only voice -- just one voice among many, and economists are fairly noted for disagreeing over many things -- but your claims to some higher authority are not likely to impress me much unless and until they can be backed up with something.
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Originally Posted by CaptainObvious
Again, the Theorem is correct- one can debate computations and application.
No one is debating any theorem. We are talking about the so-called Laffer Curve and its relevance to supply-side economics, particulalry with repsect to fiscal policy analyses, claims, and prescriptions.
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Originally Posted by CaptainObvious
The post got sillier and sillier, unraveled more and more as it went on, then fell apart totally with the lame personal attack. (There were so many better comebacks if you wanted to make sure you got the word "range" and the number "6" into it). Another example of how NOT to gain respect.
It was late. There were no doubt better ways to have characterized the shortcomings of your claims. Otherwise, I do not demand or seek respect. You may extend it or not as you see fit.
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Originally Posted by CaptainObvious
Nice buzzwords throughout as well. I particularly enjoyed "Voodoo Economics". That is one catch phrase that couldn't be resurrected fast enough, in my opinion. "Supply Siders" was another favorite, but a little more trite.
The voodoo descriptor was properly attributed. Supply-side is not a buzzword.
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Originally Posted by CaptainObvious
Unfortunately they have little to do with science. There is a HUGE difference between sound science and its application to the economy by politicians. You seem to attack the former when I think you're whole problem with it is the latter.
I would indeed have frequent problems with the ways in which economics is understood and applied by politicians. Their function, however, is to pass good theory through a political lens. Some distortion will always result. My complaint in this case is that bad theory has been put through the lens, and that there are people who want to do that some more. I am opposed to that on the grounds that by now we should have learned to know better.
I don't think Leo Strauss would be very fond of today's 'neoconservatism.' He was an anti-totalitarian, but he was also something of a pragmatist, and would probably be insulted by the sloppy implementation and lack of strategic thinking related to the Iraq war.
You can't. Just as you can't tell how many people would have died if there had been a major earthquake in St. Louis yesterday. All you can do is construct models and see what they show you. In the St. Louis scenario, they would show you that quite a lot of lives were lost. In the Reagan or Bush tax cut scenarios, they would show you that quite a lot of revenue was lost.
The difference being that the data available for the St. Louis scenerio would be accepted, yet you deny the revenue data and claim it as being invalid. No scenerio result can be considered credible when the available data is ignored.
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As long as you consider a littler under 40% in four years to be modest.
You might want to recalculate those numbers. The 4 year increase from '96-'99 was only about 26%, substantially less than the 37% increase from '03-'06.
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Ah, yes. All the good things that happened between Jan 1993 and Jan 2001 were the result of a) Ronald Reagan, or b) the Republican Congress. Here's another hint: The Republican Congress was too busy with ranting over its insipid Contract with America, with shutting down the government, and with diverting the nation's attention and resources into the yellow journalism of its transparent Get Clinton vendetta to take credit for much of anything at all. Well, maybe undermining the Agreed Framework, leading directly to North Korea's emergence as a rogue nuclear state. Maybe they could take credit for that.
Big difference. Congress invokes economic policies, the Executive Branch makes agreements with other nations.
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Tax cuts take effect very quickly, as the IRS all but immediately issues revised withholding tables that increase the bottom line on everybody's paycheck. Bush's tax cuts went into effect in 2001 and 2003. It was 2005 before revenues managed to return to the levels of 2000, longer still before approaching the levels that simple population and cost-of-living increases would have netted over that 2000 base.
Sorry, tax cuts don't take effect on revenues very quickly at all, especially when they include capital gains cuts. Initially, income tax cuts aren't apparent to the Treasury until the following filing season, when revenues would actually fall, if income tax rates were related. Capital gains requires time for investors to analyze their options, liquidize their assets, and make their investments, before they realize a return and before the additional jobs are created that also increase federal revenue. This usually takes 16 - 24 months to come to fruition, generating economic growth. The more economic growth (GDP), the more revenues received. Tax revenues correlate with economic growth, not tax rates.
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There is zero proof and substantial ridicule of the proposition. Like much of what the Chicago School has produced, you can make elegant charts (though the Laffer Curve is certainly not one of them) and claim based on those that your theorems must hold within some carefully constructed set of theoretical circumstances, but in the world that actually exists, none of it ever turns out as planned.
I'm not a student of Laffer, so I must plead ignorance. However the "theorem", as you call it, of tax cuts increasing revenues, has turned out well in the Bush presidency, as in other administrations. It's been proven by statistics and accepted by most economists.
I don't think Leo Strauss would be very fond of today's 'neoconservatism.' He was an anti-totalitarian, but he was also something of a pragmatist, and would probably be insulted by the sloppy implementation and lack of strategic thinking related to the Iraq war.
Too bad Leo Strauss wasn't the one bending the White House ears, but some of his students certainly were.
Some of his students were as follows - Elliott Abrams, Alan Keyes, Richard Perle, Bill Kristol, and Irving Kristol and most notably, Paul Wolfowitz and considering his Platonic notions of intellectual elitism, yeah I think he would have wondered why these guys dropped the ball as bad as they did. They followed Strausses political philosophies but they also looked to Niccolo Machiavelli's writ, "The Prince" as their almost religious mandate. I think they should have included Sun Tzu and Frederick the Great's works in their reading list.
As George Bush recently stated in the NY Times concerning making his own realities instead of having to follow or abide by the reality of the what really is, it is clear that their perspective was not only extremely egocentric but delusional and living in pure fantasy. Even really intelligent nutjobs are still nutjobs.
Instead of borrowing money from the rich by selling them government bonds why don"t we tax it from them? That way there would be no debt to pay off.
For example a variation on the "flat tax". first all income from all sources is counted. No differences considered for lotter winnings, inheritances, wages, bribes what ever. If an individual recieved income itm is counted.
Then allow an individual deduction of three times the median income for each zip code. Set the flat tax rate at whatever level is needed to pay that years government expenses.
Businesses would be taxed as individuals with dividends being an allowable expense. Investments would be deductable in the year expended. There would be no "intangable drilling expenses" or other corporate loopholes.
Instead of borrowing money from the rich by selling them government bonds why don"t we tax it from them? That way there would be no debt to pay off.
For example a variation on the "flat tax". first all income from all sources is counted. No differences considered for lotter winnings, inheritances, wages, bribes what ever. If an individual recieved income itm is counted.
Then allow an individual deduction of three times the median income for each zip code. Set the flat tax rate at whatever level is needed to pay that years government expenses.
Businesses would be taxed as individuals with dividends being an allowable expense. Investments would be deductable in the year expended. There would be no "intangable drilling expenses" or other corporate loopholes.
Just a way to keep it simple.
Theoretically attractive, but subject to the inevitable laws of reality, which include the instantaneous transfer of business capital from a highly taxed situation (e..g, the one you have proposed for the US), to one less highly taxed (e.g., anyplace else in the world). Corporations would simply transfer their exposed assets to other jurisdications, and quickly pauperize our government and its vassals (i.e., us).
Corporations don't care. Corporations aren't nice. Corporations want all the money.
Wow! This thread has been so educational for me. I always thought a neocon was a new convict, someone who had just been convicted for their first felony and was being inducted into the subculture of the county lockup. Now I realize that a neocon is way worse than that!
I failed to mention that countervailing tariffs equal or greater then the savings attributed to wages, environmental or tax advantages, would be levied on any corporation that off shored production. If this was not sufficient the corporation's charter would be pulled and the stock rendered worthless. Corporations are creatures created by the State to limit owner’s losses to the value of the stock they own instead of their entire personal fortunes as in partnerships and proprietorships. Joint stock corporations are government creations and are subject to any and all regulation or action the government decrees including execution.
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