We had a hightly distorted economy based on bullshit housing and cheap and fake capital insurance for about 15 years. Those excesses have to be worked through. Therefore most ideas that include govt spending or real estate rescue will be complete bull shit. There needs to be structural change. Tax cuts if permanent should not designed to fix the liquidity trap... they should be designed to change the way investors and consumers behave. For instance... do you have any doubt the recession would end if we eliminated income tax altogether. There would obviously be more spending... and there would be whole new businesses which would spring up around an economy without income tax. There would probably also be some losers in such an economy but is there any doubt our economy would take off? so... we can see by that example tax cuts can be beneficial. so lets start working on an intelligent and lower tax system.
Argumentum ad absurdum? We're not going to ever have zero income tax, nor should we. And ironically you're stressing the demand side of the equation, ie. if people had more money the economy would take off. Yep, it would. But income taxes (excluding the California problem for a moment) are, compared to our peers, low. This tax cutting argument is nonsense, at least in this environment. Edit: just to clarify, I'm not disagreeing with your assertion that in some circumstances tax cuts can be beneficial, I agree with that. I'm only saying that they're no help right now. Income taxes are not high, and while corporate taxes are high, they have not prevented our corporations from accumulating the biggest profits and cash reserves in American history.
Newt! Victor of panty raids across the campus quad, even as his peers slogged the paddies of SE Asia! Newt! Gadfly extrordinaire. Unseated Jim Wright, then found he couldn't run the place himself. Newt! The entrepreneur who can't keep his hand out of the till (fannie, freddie, I forget which) or off the skirts of the employees (you know). It all so fits.
It would definitely stimulate the economy if we moved from present income tax levels to zero. However the market would soon find an equilibrium at that point an then there is nothing left you can do, every bullet in the gun is shot. The stimulative effect from tax, or spending rates does not come about based on an arbitrary number the stimulative effect comes from the amount of change involved. For example an economy would probably see a bigger jump if you dropped tax rates from 32% to 16%, as opposed to dropping rates from 1% to 0%, because all of a sudden the system is flooded with all kinds of new money. Same thing can be said about spending, if you increase spending from 3.6 trillion to 4 trillion you would see less of a change then if you changed spending from 2 trillion to 3 trillion. You often hear lefties argue that Obama hasnt really thrown out a ton of regulations, well it isnt necessarily the number of regulations that have come about under his administration, it is the drastic change because of his regulations that is killing the economy, because we havent had time to find a new equillibrium. The housing bubble came about because the repeal of glass steagall all of a sudden opened the flood gates for banks to do whatever they wanted, If glass steagall had been repealed in the 70's we would not have had a housing bubble in the 2000's, as banks would have had lots of time to adjust, so it isnt necessarily the lack of the law that caused the bubble, it was the drastic change in the law that caused the bubble. The reason Supply side worked so well in the 80's was because of the DRASTIC change in tax rates under Ronnie Rayguns. The problem now is that we are out of ammo and the only measures we can take on taxes or spending are the equivalent of pissing into the wind, we are broke. The problem is that in both cases we are just dying a death by a thousand cuts, tax rates keep drifting lower and lower, and spending keeps drifting higher and higher because the government always feels like they have to get involved in some way, so we only ever see 1 side of the equation. Dems want to increase spending to boost the economy, republicans want to decrease taxes to boost the economy, but no one wants to go the opposite way in an overheated economy. What happens when spending gets so high it cant go any higher or taxes get so low it cant go any lower? Then there is no bullets left in the gun. Thats pretty much where we stand right now. We would be far better off if the government just sat on the sidelines every single time there was a recession, because we just keep racking up more and more debt, and pulling ourselves closer and closer to the "zero" point where you cant even change spending or taxation anymore, because we have no more money left. The slate needs to be wiped clean to get the economy started again, all we have been doing is nickling and diming and delaying the inevitable.
1. No tax is better than taxes which give the govt and extra bullet.. but I realize arguing for no taxes is not a winner. Which is why an intelligent flat tax would be so good. Less rules, less expense, less time consumed. Lobbying could not be written off. (It would be less effective and should not be allowed anyway) 2. taxes and spending should be cut. At one point our country did not have an income tax... we still had a great country. Spending is the problem. Spending is forcing you to say... maybe we should raise taxes.... Well why the fuck should we raise taxes, when we could lower spending. Why the hell should govt be doing 3/4 of the shit they do. When the Irish got here they started the knight of columbus to take of themselves. Kennedy said ask not what your country can do for you. I agree in helping the truly needy but lets start phasing out spending on everything.. go back to serious means testing and make every able bodied person getting handouts from the govt or a salary take 5 % less a year for each of the next 10 years and cut retirment benefits 30%. The govt is a monster and must be stopped. do you know how many people around me make 6 figure working for homeland security... its insane. Family members who used to work in other real jobs... now all do govt consulting or contracting. ViaSat near my home employs dozens and dozens of friends. Others work for the Navy... others consult with the CIA as far as I can tell. And all these people are making great money... cops and firman in 800000 dollar homes? Is that right? do we really think our private sector and supporting that kind of spending. its fricken nuts... I have no idea how we can build 100 million dollar planes... give out 2000 a month to the unemployed... pay for section 8 housing... throw all the black guys in their 20s in jail for dealing drugs, fight 3 wars... building drones... fire million dollar missles.. pay teachers cops on fireman and govt contracts 6 figures.. do you know how much school principles make. lets stop this fricken insanity. School principles do not need to make 150000 dollars a year. In my opinion he is rich... he can do whatever the hell he wants to do with the rest of his life and make six figures a year. Is that right. Is that sustainable. Should I have to pay more for that shit? Really -- who are the people who calling for more spending and taxes... You are stealing from me and your causes are not worthy. As Roger Daltrey said in "Who Are You" I really want to know... I just made myself pissed. I need to do something about this.
I dont know if this is directed at me or your just letting steam off, but i agree with you 100% in terms of what you have said, my argument above was purely from an economics standpoint.
it was not directed at you... your post just got me thinking. I need ricter to remember its not just federal income tax. Just about everything is over taxed and it confiscates about 40 to 55% of many productive people's work.
By the way arguing the extreme ... it is a very valid form of argument as you just saw how it stripped away your argument that reducing taxes can not help. In fact.. without my knowledge wikipedia just used my example... http://en.wikipedia.org/wiki/Reductio_ad_absurdum Reductio ad absurdum Reductio ad absurdum (Latin: "reduction to the absurd") is a form of argument in which a proposition is disproven by following its implications logically to an absurd consequence.[1] A common type of reductio ad absurdum is proof by contradiction (also called indirect proof), where a proposition is proved true by proving that it is impossible for it to be false. That is to say, if A being false implies that B must also be false and it is known that B is true, then A cannot be false and therefore A is true. Where such an argument is premised on a false dichotomy, the ostensible proof is a logical fallacy. Two simple examples of reductio ad absurdum are: Proposition: "Raising taxation rates always results in increased tax revenue." Proposition: "Lowering taxation rates always results in increased tax revenue." These can both be disproved using reductio ad absurdum as follows: "If taxes were raised to 100% of income, individuals would not work, and companies would not operate, resulting in zero income, and thus zero tax. That is less than current tax income, thus the proposition is false." "If taxes were lowered to 0%, no taxes at all would be collected. Zero will always be less revenue than even the lowest non-zero tax rate would produce, thus the proposition is false." This is also illustrated by the Laffer curve. The ontological argument for the existence of God, as it was originally stated by Anselm of Canterbury, is an example of an attempted reductio ad absurdum.[2] [edit]See also