MoneCNN
So the left has lambasted the right for years because of their claims that the Laffer curve was unscientific, wrong and didn't do what was claimed. Well while the Laffer curve as a pure mathematical concept might not be as strictly linear as portrayed and might need a bit of complexity added to the simplistic way it is caricatured, however it has fared far better than Keynesian economic stimulus plans. It can be easily understood that people are going to stop being as productive, stop investing, and stop basically working when they are no longer working for themselves but instead are working for the government. The problem comes in claiming that all tax cuts can pay for themselves when the rate is within the person working for themselves and that relationship is strictly linear. So can we just plot a perfect mathematical return for dropping the rate from 33% to 28% and know exactly the rate of return in economic activity to have these cuts "pay for themselves" in terms of economic stimulus? It appears that the models are imperfect in this regard. There is an increase in economic activity, the amount of revenue does grow well beyond what it was initially and certainly beyond what it was with regard to an economic downturn, but the predictive power of the model is imperfect. It needs refinement, especially when segments of the population are off the tax rolls entirely or when the rates are especially low, the predictive power has to diminish.
That said the flip side of this equation which has been advocated for by various RINO's, that is loved by almost all leftists and that has been applied throughout most of the Westernized world and certainly by the Obama administration has been a catastrophic failure. While the Laffer curve and the tax cuts associated with it, has indeed generated some debt when spending has outstripped increases in revenue. But there have been jobs, and growth and a return to economic health. Keynesian economic stimulus has proved an absolute bust with regard to government spending providing multipliers that help improve economic activity. The debts taken on by Japan, the PIIGS of Europe and the U.S. are basically slave chains for future generations forged by bad policy. They've been sold by their parents into servitude due to buying into a bad belief system that says you can have something for nothing. Simply have the government spend a dollar and at some point through the magic of the multipliers, you end up with $1.50 or something similar depending upon where and how you spend the money.
This has proven flatly untrue. Anyone who continues to maintain this claim should be considered anti-science, anti-intellect and finally anti-logic. Japan has stimulated themselves to almost 200% of GDP with no positive results to show for it. The U.S. is quickly heading toward 100% of GDP with no economic gains. The PIIGS of Europe with all their attempts are bankrupt and destroying the Euro and possibly the entire E.U. with it. How many millions of people and trillions of wealth must be destroyed following this bad school of thought?
So staring with the midterms in the U.S. or with the next election in your respective home country, ask if the candidate is endorsing Keynesian solutions and if they are, treat them like the ignorant fools they are and hand your vote over to someone who will do more than sell you and your progeny into debt slavery.
Quote:
Europe isn't the only one spooked by its public finances. Earlier this month, the surge in U.S. government spending helped push the national debt for the first time to a scary $13 trillion, which represents about 90% of GDP. Despite a $787 billion stimulus package, unemployment continues to hover near 10%.
The problems illustrate the limits of one of Keynes' core percepts -- that stimulus government spending would pay for itself. But now we've seen that a government that spends more doesn't necessarily gain more in tax revenue.
"You can't solve a problem with just spending more money and acquiring bad debt," said Hunter Lewis, author of Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts.
Keynes has long been a source of debate among economists and other academics. Keynesian economics served as a model during the later part of the Great Depression, World War II and the post-war economic expansion. It lost some influence in the 1970s when both the inflation rate and unemployment rate soared, but many world leaders in the wake of the financial crisis in 2007 referred to Keynesian economics as the basis for government stimulus programs.
Spending to stimulate jobs
Political economy professor Allan Meltzer of Carnegie Mellon University says doctrines of the revered economist have often been misinterpreted. For one, Keynes was not a big proponent of long-term structural debt. He thought government debt should be temporary and used as a way to stimulate the economy. What's more, the mistake many governments make applying Keynesian economics these days is to target spending on consumption rather than investment, which in turn, could spur steady job growth.
The problems illustrate the limits of one of Keynes' core percepts -- that stimulus government spending would pay for itself. But now we've seen that a government that spends more doesn't necessarily gain more in tax revenue.
"You can't solve a problem with just spending more money and acquiring bad debt," said Hunter Lewis, author of Where Keynes Went Wrong: And Why World Governments Keep Creating Inflation, Bubbles, and Busts.
Keynes has long been a source of debate among economists and other academics. Keynesian economics served as a model during the later part of the Great Depression, World War II and the post-war economic expansion. It lost some influence in the 1970s when both the inflation rate and unemployment rate soared, but many world leaders in the wake of the financial crisis in 2007 referred to Keynesian economics as the basis for government stimulus programs.
Spending to stimulate jobs
Political economy professor Allan Meltzer of Carnegie Mellon University says doctrines of the revered economist have often been misinterpreted. For one, Keynes was not a big proponent of long-term structural debt. He thought government debt should be temporary and used as a way to stimulate the economy. What's more, the mistake many governments make applying Keynesian economics these days is to target spending on consumption rather than investment, which in turn, could spur steady job growth.
So the left has lambasted the right for years because of their claims that the Laffer curve was unscientific, wrong and didn't do what was claimed. Well while the Laffer curve as a pure mathematical concept might not be as strictly linear as portrayed and might need a bit of complexity added to the simplistic way it is caricatured, however it has fared far better than Keynesian economic stimulus plans. It can be easily understood that people are going to stop being as productive, stop investing, and stop basically working when they are no longer working for themselves but instead are working for the government. The problem comes in claiming that all tax cuts can pay for themselves when the rate is within the person working for themselves and that relationship is strictly linear. So can we just plot a perfect mathematical return for dropping the rate from 33% to 28% and know exactly the rate of return in economic activity to have these cuts "pay for themselves" in terms of economic stimulus? It appears that the models are imperfect in this regard. There is an increase in economic activity, the amount of revenue does grow well beyond what it was initially and certainly beyond what it was with regard to an economic downturn, but the predictive power of the model is imperfect. It needs refinement, especially when segments of the population are off the tax rolls entirely or when the rates are especially low, the predictive power has to diminish.
That said the flip side of this equation which has been advocated for by various RINO's, that is loved by almost all leftists and that has been applied throughout most of the Westernized world and certainly by the Obama administration has been a catastrophic failure. While the Laffer curve and the tax cuts associated with it, has indeed generated some debt when spending has outstripped increases in revenue. But there have been jobs, and growth and a return to economic health. Keynesian economic stimulus has proved an absolute bust with regard to government spending providing multipliers that help improve economic activity. The debts taken on by Japan, the PIIGS of Europe and the U.S. are basically slave chains for future generations forged by bad policy. They've been sold by their parents into servitude due to buying into a bad belief system that says you can have something for nothing. Simply have the government spend a dollar and at some point through the magic of the multipliers, you end up with $1.50 or something similar depending upon where and how you spend the money.
This has proven flatly untrue. Anyone who continues to maintain this claim should be considered anti-science, anti-intellect and finally anti-logic. Japan has stimulated themselves to almost 200% of GDP with no positive results to show for it. The U.S. is quickly heading toward 100% of GDP with no economic gains. The PIIGS of Europe with all their attempts are bankrupt and destroying the Euro and possibly the entire E.U. with it. How many millions of people and trillions of wealth must be destroyed following this bad school of thought?
So staring with the midterms in the U.S. or with the next election in your respective home country, ask if the candidate is endorsing Keynesian solutions and if they are, treat them like the ignorant fools they are and hand your vote over to someone who will do more than sell you and your progeny into debt slavery.
"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell
"During times of universal deceit, telling the truth becomes a revolutionary act." -George Orwell
