🚀 go-pugleaf

In article <thompson.714869497@daphne.socsci.umn.edu>, thompson@atlas.socsci.umn.edu (T. Scott Thompson) writes:
> pjm@anegada.sps.mot.com (Patrick J. McGuinness) writes:
> 
>>In the 1930's there was a failure to understand the dangers of
>>protectionism, and an obsession with budget deficits (at the
>>expense of economic growth).
>>In the 1970's Keynesianism became a false idol, as economic policy tried
>>to fiscally tinker with demand and macroeconomic issues, while structural
>>problems were left untended (creating stagflation).
>>In the 1990's, our failure to control govt spending, with a budget
>>that is about 70% "entitlements", has paralyzed our ability to
>>effectively make wise decisions, such as enact pro-growth tax cuts,
>>or even create Govt "infrastructure".
> 
>>More details on 20's/30's, 60's/70's and 80's/90's
> 
> [deleted]
> 
>>Notice that in *all* cases, there was an intervening situation of
>>increased taxes, tariffs, regulation, or combinations of these.
>  ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
> 
> I am always amazed at how people claim to understand business cycles
> so well when most economists are of the opinion that they are among
> the most poorly understood of economic phenomena.
> 
> Let me point out some possible alternative "explanations."  The
> Kennedy and Reagan tax cuts (together with the Vietnam war and War on
> Poverty during the 60s) generated large government deficits.  There is

	Jesusssss Christ.  You post 500 lines explaining that tax cuts generate
growth (and more revenues) and someone still comes along trotting out the old
"tax cuts equals deficits".

	SPENDING BEYOND REVENUE INTAKE CREATES DEFICITS.  PERIOD.

> no way to sort out whether or not the resulting "booms" were due to
> lower tax rates or due to Keynesian style deficit spending.  Second,

	Read "derailing" parts 1,2,3.

> isn't it possible that the inflation in the 70s had something to do
> with the enormous run-ups in oil prices by OPEC in '73 and '79 rather
> than do to "bad policy" by the U.S. government?  Third, I find it

	No.  Read "The Seven Fat Years".  Inflation came first.

> plausible that both the recession of 1979-81 and the ensuing drop in
> inflation and economic recovery were as much due to the radical change
> in monetary policy introduced by the Fed in the late 70s as they were
> due to changes in fiscal / regulatory policies.

	The tightening monetary policy helped control inflation.  The recession
was merely the conclusion of the idiotic policies of the 70s.

> I am _not_ suggesting that my alternative theories are right and
> others are wrong.  Instead, I am suggesting that the evidence about
> "causality" for business cycles is pretty weak.

	Hmmm, well.  The evidence points to the legitimate success of
supply-side economics.  Growth is spurred by putting more disposable income
into the economy.  Production is spurred by providing more investment funds
(e.g., don't tax capital gains).
	Competition is spurred by keeping government out of the way of
business.

	There's the US in the 80s, and Mexico today.  What more proof do you
want?  Eastern Europe tomorrow?

Brett                                                      
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