🚀 go-pugleaf

demon@desire.wright.edu (Stupendous Man) writes:
>thompson@atlas.socsci.umn.edu (T. Scott Thompson) writes:
>>
>> 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.

Jesus Christ yourself.  Any economic model that resolves into a
handful of slogans like the above is far too simplistic to be
useful.  Spending beyond revenue intake can have any of a number
of effects, depending on the overall state of government finances
at the time, how much slack there is in the economy, and what
that spending is used for.

>> 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.

More matras, none of which are always true.  If you remember, a
counterexample for the last was the cable tv industry in Arizona
(or New Mexico?), offered on the net in the past month.

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

The US in the '80s didn't have sustainable growth.  Mexico today
has still got a lot of problems.  Eastern Europe tomorrow I would
have believed in if the Western industrialized countries had invested
there enough; as it is, we'll see.
-----------------------------------------------------------------------------
 Chris.Holt@newcastle.ac.uk      Computing Lab, U of Newcastle upon Tyne, UK
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  Still shone the candlelight on the empty screen, after the power went.