Keys To Recovery....Cut Taxes, Cut Spending

Discussion in 'Economics' started by libertad, Jan 13, 2009.


    10% Consumption tax only

    Dramatic cuts in government expenditures


    Will provide the best means towards recovery....
  2. Lucrum


    If only we had politicians with the will and back bone to do it.
  3. Mav88


    we don't have the people with the backbone, it would mean cuts in social welfare programs
  4. burn8


    Its not about backbone. What you are suggesting is that the ones in charge give up power and that is not going to happen.

    Its not that they dont have the guts, its that their design runs counter to the real solution.

  5. Austrian 'economics' does not care about employment rates.

    Recovery in your terms = recovery of fiscal sanity, but it also implies 10% consumption tax will likely not be enough (sales tax is already 7%+ on average) as well as dramatic cuts in govt expenditures means massive job losses, and thus more decreases in discretionary income and overall price level.

    You seem to want your cake and to be able to eat it too.

    The reality is your proposal would mean 35%-40% unemployment, no doubt a sound currency, a requirement of probably 30-40% consumption tax rates to balance the budget and past obligations, and a net massive destruction in economic activity, the amount of capital out there (decreased lending, etc).

    But your currency would no doubt be sound.

    On the other hand, you can't eat currency. And 40% unemployment = people that have no money buy food.

    Your school of thought doesn't believe in social programs to provide that 40% food ... so I don't see how your recovery is better than my version (with more people eating, with money not as 'sound').
  6. AND that they "don't have guts"..
  7. Where do you come up with this crap? Do you pump yourself full of crack before you start posting?

    The nation would go back to self substinence and start producing again while shedding off the leeches & parasites that the financial industry has become.

    Right now USA is third world status, half if not most, in poverty levels, people starving & homeless all over. And it has just begun.
  8. Ron Paul, Bob Barr and a few others. They are there.
  9. Also, replying to his points (I can't believe anyone would spend money on a book by this guy who clearly doesn't understand key fundamentals within economics).

    In this case, the government projects will serve to raise the wage level of these occupations, increasing disposable income and thus aggregrate demand. That is the intended purpose.

    Again he misses the point. It is to stimulate demand as I outlined above.

    What is 'reality'? He says this as if there is some baseline level of capacity (supply) in the economy that is 'reality', the rest froth. Again, this is wrong. There is no concrete level of supply or demand that is right or wrong. Last I checked, there are billions (most) of people who live in abject poverty. I'm sure all of this extra supply could be increasing their quality of living. The whole point of 'economic prosperity' is to raise everyone's standard of living, ensuring they can eat, have work, and advance society. The Austrians are fixated on some arbitrary definition of too much and too little, and dictate policy that way.

    I hate to say it, but this guy makes a great case that free market economies are great at sending false signals that cause copius amounts of malinvestment. He isn't far from implicitly suggesting central planning (done properly) may lead to great economic efficiency. Read in between the lines!

    He doesn't take into account the multiplier effect of investment. When the bridge is finished, new things are able to be accomplished that were not before. Better example: US railroads and US roads infrastructure projects. Before they existed, it was much more expensive to transport goods. Now with lower transportation costs and movement of goods actually being possible, money put into the pockets of the bridge and road builders can be used entreprenuerally(sp) to start profitable businesses. Furthermore, the bridge builders have money they wouldn't have had otherwise to spend in other areas of the economy. That is a simplistic explanation, but gets the idea across of why government investment can be productive and necessary.
  10. We must first see coordinated social outrage demonstrations [rioting] and/or a revolution for this to even be considered.

    Unti then, a 12-pack of beer and new episodes of "24" help the sheeple maintain their sanity [obedience].
    #10     Jan 13, 2009