Playing the "Opposite Game"

[heironymouspasparagus]

Careful we vs us; that don't play well here in Murdochianistan.

[Conan71]

Amazing how some can get half the story and then just ignore the other half.  Gaspar said:
Remember how some crazy people suggested that cutting taxes like Germany (or like we did under Kennedy, Regan, and Clinton) would make more sense then spending like a frat-boy in Vegas?


And then how Kennedy/Johnson, Reagan, and Clinton ALL followed tax cuts with tax increases.  And not just little ones either - Reagan's increases were world record increases. 

This is not Keynes, it is history.  And it is fact.  Maybe that's why it "plays" so poorly with the "you-know-who"...facts aren't a real big item way out there.

As far as "Frat Boy", well that is the way he did it for 8 years, isn't it?

What is your point exactly?  Were any of those cuts during recessionary or shrinking economic trends?  Why were taxes cut in the first place in those citations?  To jump-start the economy.  I don't believe anyone ever said tax cuts had to be permanent based on the needs of the gov't.   

[Conan71]

Those who believe that a tax increase won't affect or can cure the present economic woes have one last chance to prove they are correct.  Better get after it.

Here's the beautiful part, if they were to increase taxes and it were an economic failure, it will still be Bush's fault.  What a great back-stop for any failure of his successors.

[Red Arrow]

You bet.  It's pretty awesome that they can offer government pensions, lighter workweeks, more vacation time and extended family/medical leave, as well as government-run healthcare, and still be a bright spot of productivity in the global marketplace.

I'm totally cool emulating this sort of economy.

The last I heard from a young (30 something) German engineer with his own business, lighter workweeks and more vacation time are a thing of the past.  It probably depends on who you work for and what business you are in.

[heironymouspasparagus]

Conan,
You really should study up on history more.  I will try to keep it simple with as few polysyllabic words as possible - oops, sorry!

The point was a response to Gaspar's comment about Kennedy, Reagan, and Clinton tax cuts.

Simple answer, that has been stated here numerous times, Yes.  

All cuts mention by Gaspar were during significant recessions.  Followed by increases while still in those recessions.  All of which led to reduced deficits and smaller increases of the national debt, which has historically meant lower inflation increases and apparently better economic activity - at least that is what the facts of the historical record show.  But I guess that could have all been faked - maybe they did it in a sound studio like the faked lunar landings??


But then, I am sure NOW, the "you-know-who" must know much better than 70 years of economic experience.

[Conan71]

Conan,
You really should study up on history more.  I will try to keep it simple with as few polysyllabic words as possible - oops, sorry!

The point was a response to Gaspar's comment about Kennedy, Reagan, and Clinton tax cuts.

Simple answer, that has been stated here numerous times, Yes.  

All cuts mention by Gaspar were during significant recessions.  Followed by increases while still in those recessions.  All of which led to reduced deficits and smaller increases of the national debt, which has historically meant lower inflation increases and apparently better economic activity - at least that is what the facts of the historical record show.  But I guess that could have all been faked - maybe they did it in a sound studio like the faked lunar landings??


But then, I am sure NOW, the "you-know-who" must know much better than 70 years of economic experience.

Really? What recession were we in when Clinton raised taxes?  Were we still on the downward spiral the Reagan increases?

[heironymouspasparagus]

You don't remember?  Too much red dye #2 in the Kool-Aid.

Yes to Reagan, we were still in the depths of the recession.

No to Clinton.  The economy was moving along without boom or bust.  The tax increases just "happened" to correspond to the beginning of a huge boom.

It makes just as much sense to say that tax increases cause economic booms.  Probably more, given the actual historical facts.

But it is much more complicated than that, as I have said MANY times here.  The combination that really seems to kick us into high gear, or at least solid recovery, is a cut, followed some fairly short time later by an increase.  I cannot imagine how that works - it is the most counter-intuitive thing imaginable to me on the economy.  But we got a LOT of history of it working.

But then, we hadn't exported all the blue collar jobs overseas at that point, either.  We are down to about 10% manufacturing from about 30% 25 years ago or so.  Huge wild card - and I don't see much evidence that those jobs are coming back very fast.  THAT is where the unemployment is right now.

[nathanm]

Really? What recession were we in when Clinton raised taxes?  Were we still on the downward spiral the Reagan increases?

In reality, we were 18-24 months removed past the Bush I recession. (I call it that because I have no better name at hand).

[Conan71]

In reality, we were 18-24 months removed past the Bush I recession. (I call it that because I have no better name at hand).

And that is what I recall as well.

[nathanm]

And that is what I recall as well.

FWIW, if current trends continue, the economy will be in a similar position sometime in the next 12 months or so.

[Conan71]

FWIW, if current trends continue, the economy will be in a similar position sometime in the next 12 months or so.

Let's hope.  Either we've had a major anomaly this month or things are turing around big time.  For November so far, we've booked 1/4 of last year's total sales.  One large order is to an asphalt company upgrading a plant (I don't know if you attribute that to more gov't spending on roads, or simply being in the right place when the enevitable replacement of old equipment became necessary), a major heating re-hab project in a prison, a couple of rendering plants making upgrades, and selling equipment to the oil industry for inland production.

In some ways, I almost have to wonder if some companies and individuals have held on to money hoping the government was going to give them some tax breaks and simply decided they can't wait any longer to move forward, that they will have to be truly profit-motivated in investment and seek that profit on their own merit and efforts, not via a spiff from the gov't in the form of tax credits or breaks.

In any case, the manufacturing and fabrication shops around the area seem to have a steady flow of work.  I don't believe anyone has huge back-logs as of yet, but that's not really useful either as that creates a whole other set of problems like ungodly-high raw material costs.

[heironymouspasparagus]

Everyone is remembering the 18-24 months from the Bush I recession - do you also remember the Bush I, "watch my lips" new taxes?  Before Billy Bob.

[Conan71]

Everyone is remembering the 18-24 months from the Bush I recession - do you also remember the Bush I, "watch my lips" new taxes?  Before Billy Bob.

I'm quite a student of history.  And, let's see, we had a recession?

IMO, the recession of the post-Gulf War was more a confidence issue- lack of confidence in global stability and energy markets following the war.  As well, we were due for a cycle of a downturn.  Real estate and borrowing heated up during the Reagan years along with sloppy oversight on the S & L industry.  Unfortunately, no one else (at least those who could protect stupid people from themselves) had a very long memory and we just repeated that cycle though on a much larger scale.

Also, if the press successfully blurts out "recession" enough, there will eventually be a recession simply because they scare consumers and small business people back into their shells.  It's what I call a media pygmalian.  Hammer a message long enough and people will believe it.  Much as you might think Faux heads have heard "tax cuts" for so long that they will see zero benefit to a tax increase even if there is one.

[nathanm]

I'm quite a student of history.  And, let's see, we had a recession?

If my dad was still alive, I think he'd probably be happy to tell you all about that little recession. In the broader economy, it wasn't much of a recession, though. GDP was down only slightly..it was more a sudden lack of growth than negative growth. Our latest recession, on the other hand, did have a significant negative growth associated with it.

I must mention once again, because it can't be mentioned enough, that FRED is incredibly useful for analysis of the economy.