99 Weeks Later, Jobless Have Only Desperation

[Ridgerunner]

Another thing is that I had to stay overnight in hospitals, numerous times in my life. There wasn’t anything so terribly wrong with me that I couldn’t have gone home. No, I had to stay there because the other women in my life were all at work, and couldn’t care for me at home. In a full twist of irony, many of those female relatives are nurses!

This is what we women do: we cook each other’s food, we care for each other’s sick, we raise and teach each other’s children, we feed and diaper each other’s babies, we bake each other’s bread, we cut each other’s hair, etc. It’s insane.

And everybody concerned donates a big portion of her effort to the government.

On the other hand, sometimes it’s very useful to have extended family members who make themselves available to aid the others. If there are enough of them with the right skills and availability, it sure saves a lot in income taxes.

In any extended family (including mine) there are those whose main contribution is as a “hunter/gatherer” out in the working world…the providers of cash. There are those who can provide all sorts of “in kind” benefits. In some families, they do, but in most, they don’t. What few families have is an efficient use of resources. We all think we have to be “hunter/gatherers”, and it seems we must, but it has to be recognized that in doing so, we’re giving away 40% or so of the efforts to the government at its various levels.

And we wonder why we so often seem to just be running in place.

 

[CatholicGerman]

Capitalism and socialism may be blips in the story of humanity.

I have a soft spot for feudalism.

Hmm… I think each type of market makes sense at a different level of societal organization. My family is communist and authoritarian, for instance. My extended family is socialist and democratic. The larger society leans socialist/capitalist and republican-democratic. And international societies are almost completely capitalist and republican.

Communitarianism works better the more intimately involved the people are, I think.

 

[CatholicGerman]

And everybody concerned donates a big portion of her effort to the government.

Which is why the government is so eager for women to work. They then get to tax her income. If a woman does something for her own family, only her family profits from it. But if someone pays her money to do the same thing, her work is monetized, and she can be taxed.

But the reasoning is circular. She has to work, to pay taxes, to grow the government, to provide her with jobs she can work at.

 

[Ridgerunner]

Which is why the government is so eager for women to work. They then get to tax her income. If a woman does something for her own family, only her family profits from it. But if someone pays her money to do the same thing, her work is monetized, and she can be taxed.

But the reasoning is circular. She has to work, to pay taxes, to grow the government, to provide her with jobs she can work at.

Makes sense.

 

[CatholicGerman]

Makes sense.

Yeah, but it’s also a significant but never-mentioned contributor to inflation and the growth of government. The inefficiencies are absolutely enormous. If women stayed home, there would be a massive period of deflation, shopping and “eating out” would no longer be a national pastime, but we’d all be better off.

Take public school, for instance. That reasoning is circular there, too: she has to work, to buy a house in a good school district, so that her kids can go to school all day, so she can work. It is often said that children go to school to be educated, but that is no longer the case. Educating a child only takes a couple of hours a day, at the most (ask any homeschooler or private tutor). The schools are paid for doing that, but mostly for babysitting the kids for the rest of the day. The schools are like gigantic playpens for big kids, but they are gold-plated playpens.

The average public school education in South Carolina – one of the cheapest areas of the country – costs over $11,000 per year, *excluding *teacher’s pensions (which can easily double that figure). For a 28-student classroom, that would be $308,000 per class. Let us note that only 43%, or $132,440, of that money goes to actual instruction.

Now, imagine if South Carolina just handed every family a voucher for $11,000 per year, per child. They could then afford to send their kids to private or religious school, homeschool them, hire a tutor, or register them for online classes. $11k goes a heck of a long way. Imagine if you had 5 kids. That would net you $55k every year. With that amount of money, you could hire a teacher to teach your kids, in your house, every day for 8 hours. Really. It would be the return of the governess.

Now imagine that SC politicians had both a backbone *and *a brain. They could give out vouchers for $6000/child to the parents, which would more than pay for a Catholic school education, and use the remaining $5000 to balance their state budget. That would give them $3,451,815,000 per year. That’s right. That would be almost three-and-a-half *billion *dollars per year, or 16.5% of SC’s total operating budget. And the kids would be better off! SC’s schools are notoriously dreadful, as well as being ridiculously expensive.

Everywhere you look, women working is a drain on our national finances and an accelerator of our debt. And the insane thing is that the government is spending money hand-over-fist to keep these women in employment. They are losing their employment because their working doesn’t make financial sense, and the market is responding to that.

So let the market clean house. Remove all affirmative action for women, strike all subsidies, close the public schools. Those women whose working is a net-positive will keep their jobs, or find something in the private sector (private schools and tutoring services will be hiring!), and everyone else will get sent home. If their husbands want them to work, then their *husbands *should pay for them to work. I, for one, am tired of paying other women to do stuff I can do for myself.

 

[CatholicGerman]

Out of curiosity, I just ran some numbers. California should consider doing this!

Deficit = $20 billion
Catholic school = $6500
Public school (excluding pensions) = $7,571 for 6.2 million students
Savings = $6,640,200,000

 

[Ridgerunner]

Yeah, but it’s also a significant but never-mentioned contributor to inflation and the growth of government. The inefficiencies are absolutely enormous. If women stayed home, there would be a massive period of deflation, shopping and “eating out” would no longer be a national pastime, but we’d all be better off.

Take public school, for instance. That reasoning is circular there, too: she has to work, to buy a house in a good school district, so that her kids can go to school all day, so she can work. It is often said that children go to school to be educated, but that is no longer the case. Educating a child only takes a couple of hours a day, at the most (ask any homeschooler or private tutor). The schools are paid for doing that, but mostly for babysitting the kids for the rest of the day. The schools are like gigantic playpens for big kids, but they are gold-plated playpens.

The average public school education in South Carolina – one of the cheapest areas of the country – costs over $11,000 per year, *excluding *teacher’s pensions (which can easily double that figure). For a 28-student classroom, that would be $308,000 per class. Let us note that only 43%, or $132,440, of that money goes to actual instruction.

Now, imagine if South Carolina just handed every family a voucher for $11,000 per year, per child. They could then afford to send their kids to private or religious school, homeschool them, hire a tutor, or register them for online classes. $11k goes a heck of a long way. Imagine if you had 5 kids. That would net you $55k every year. With that amount of money, you could hire a teacher to teach your kids, in your house, every day for 8 hours. Really. It would be the return of the governess.

Now imagine that SC politicians had both a backbone *and *a brain. They could give out vouchers for $6000/child to the parents, which would more than pay for a Catholic school education, and use the remaining $5000 to balance their state budget. That would give them $3,451,815,000 per year. That’s right. That would be almost three-and-a-half *billion *dollars per year, or 16.5% of SC’s total operating budget. And the kids would be better off! SC’s schools are notoriously dreadful, as well as being ridiculously expensive.

Everywhere you look, women working is a drain on our national finances and an accelerator of our debt. And the insane thing is that the government is spending money hand-over-fist to keep these women in employment. They are losing their employment because their working doesn’t make financial sense, and the market is responding to that.

So let the market clean house. Remove all affirmative action for women, strike all subsidies, close the public schools. Those women whose working is a net-positive will keep their jobs, or find something in the private sector (private schools and tutoring services will be hiring!), and everyone else will get sent home. If their husbands want them to work, then their *husbands *should pay for them to work. I, for one, am tired of paying other women to do stuff I can do for myself.

This reminds me of an event of my younger days. One of my earliest employers was told by a young co-employee of mine that his wife was going to get a fairly ordinary job outside the home. The employer’s remark was: “Well, that’s reasonable. It will probably only cost you $5,000/year for the privilege. On your salary, you can probably manage it.”

I don’t know if it cost that much or not, but considering the additional costs for clothing, gasoline, lunches, prepared food at home, babysitting, higher tax bracket, etc, it sure might have.

 

[CatholicGerman]

Yes, exactly. Many men actually like all of this make-work stuff because it defrays the cost of entertaining their wives onto the general public. But a lot of them still pay for the privilege. We actually sat down and did the math last year, when I was considering returning to work full-time. I would have to earn at least $45k for it to be worth it. Since we live out in the country, where the cost of living is low, but the salaries likewise, I wouldn’t be able to earn that much. We could sell our house and move to a bigger city, where I’d make more money, but then the cost of working would go up, as well.

So… yeah. My husband would’ve ended up paying to put his kids in a day-orphanage so that I could pretend to be doing something important. Like being paid $60k to run around with a clipboard, and nag real engineers who are trying to get some sort of actual work done.

If a housewife is a bit industrious and frugal, she’s probably cheaper for her husband to maintain, then if she was working. But most people don’t bother doing the math.

 

[Black_Rose]

Here is what we need to do to get the economy moving again: we need to get rid of the leftist president we have, cut spending, make the Bush tax cuts permanent (the uncertainty as to what Obama is going to do next, what new spending programs he’s going to ram through congress, whether the Republicans are going to be able to stop some of his worst programs or repeal them, etc. is the worse thing for our economy).
Ishii

No, I most certainly do not accept the obvious partisan pablum that is disguised as a legitimate concern for the general welfare or macroeconomic insight as an acceptable argument.

First of all, when corporations and investors have a lower marginal tax rate on their profits, there is little incentive to remunerate their employees in the form of higher wages and benefits or hiring more people, since they are able to keep the profits for themselves. If taxes were higher, then investors would receive a smaller share of profits if they decide to keep the profits since a large portion of it would be taxed away to the government, so there would be a smaller incentive to keep profits from themselves while increasing the incentive to use that money to fund higher wages and benefits or new employment positions. This would cause stagnant wages, which would lower aggregate demand, causing system overcapacity. Increased leverage may act as a short-term palliative that acts to maintain aggregate demand in the short-term but would obviously fail if the debtors would be unable to service their debts, which would cause a crisis of confidence among the creditors. This would lead to decreased borrowing and a contracting money supply when income is diverted towards debt service and repayment, enervating the consumer economy.

Second, there is little evidence that the Bush tax cuts lead to a profoundly high rate of job growth, relative the job growth The average annualized rate of job growth in the United States between March 2001 and December 2007, from the trough to the peak of the last economic system, was the lowest of all job cycles since the 1950s.

americanprogress.org/issues/2009/02/pdf/picker_jobs.pdf

Third, I am willing to accept, despite my ideological predilections, that the supply side Reagan reforms were effective during the 1980s recession, since Paul Craig Roberts, the Assistant Treasury Secretary of the Reagan Administration, offered a convincing empirical and theoretical argument for its success. However, this does not mean the same supply-side prescription is warranted right now for the current macroeconomic conditions. Roberts argues that the problem of the 1980s was stagflation and high nominal and low real interest rates as a consequence of inflation, causing a worsening Phillips Curve trade-off for employment and inflation, meaning that standard Keynesian measures of demand management would be ineffective. However, while Roberts agrees that supply-side economics were an effective policy in the environment of the 1980s, he qualifies it by saying that its salutary effects were context dependent, and not a universal panacea for economic growth and development.

Supply-side economics was a major innovation in macroeconomic theory and economic policy. It was a correction of an oversight, not a magical formula. A quarter century ago before the days of the high speed Internet and US offshore outsourcing, supply-side economics revitalized the economy’s ability to grow without having to pay the price of rising rates of inflation. This battle was fought and won long ago. Re-fighting it is a waste of time and energy in an era of new serious problems.

 

[Ridgerunner]

No, I most certainly do not accept the obvious partisan pablum that is disguised as a legitimate concern for the general welfare or macroeconomic insight as an acceptable argument.

First of all, when corporations and investors have a lower marginal tax rate on their profits, there is little incentive to remunerate their employees in the form of higher wages and benefits or hiring more people, since they are able to keep the profits for themselves. If taxes were higher, then investors would receive a smaller share of profits if they decide to keep the profits since a large portion of it would be taxed away to the government, so there would be a smaller incentive to keep profits from themselves while increasing the incentive to use that money to fund higher wages and benefits or new employment positions.

This appears to be the lynchpin of your argument; that higher taxes on investors are good because such people will then spend more on their employees since they can’t keep the money anyway.

Aside from the fact that no persuasive evidence (or any at all) is offered to bolster this central assertion, it’s about as counter-intuitive as I, at least, can imagine. Since income is never (at least not yet) taxed at 100%, employers and investors would have the very opposite incentive. If, say, my marginal rate is 35% and it goes to 40% on an additional, say, $50,000 of income, I will still get to keep 60%, or $35,000 of it. (net loss from the change: $2500) If I give the $50,000 to my employees, I will get to keep 0% of it. (net loss: $50,000).

Now, suppose I have borrowed money to expand my factory floor. I have to make principal repayments on that; repayments that will be a lot shorter term than any depreciation I will be able to take. If I bought the lot next door for future expansion, I will get zero depreciation and have to pay that entirely with after-tax dollars.

So, am I going to give the $50,000 to my employees (assuming I remain competitive if I don’t)? No, I will pay it on my debt. Understanding as I do that the government overspending will almost certainly result in higher interest rates down the road, I will want to pay down my debt as rapidly as I can. And that’s what I will do.

Now, supposing I’m just not interested in expanding my business, and haven’t been for some time, so I owe no business debt. (rare) My son wants to go to Notre Dame instead of the cheaper state U. Am I going to tell my son he has to go to the state U even though I still have $35,000 net from my business operations, or am I going to give $50,000 to my employees, even if I can remain competitive if I don’t? The answer fairly leaps to the tongue. “No. I write a $35,000 check to Notre Dame.”

Imagine that I am a small businessman; have been in business for decades and am 55 years old. Realizing as I do that my wife and I are on our own when we can no longer work, having no cushy government retirement plan paid for by taxpayers. (Retirement at 65 is out of the question) I consider whether to put the $35,000 in a Roth IRA or to give it to my employees. Understanding that I can still remain competitive in salaries, am I going to put the $35,000 into my Roth IRA, or am I going to give the $50,000 to my employees and hope somebody comes to my rescue if, say, I just physically can’t work anymore at age 70? I think the answer to that is obvious.

The government isn’t going to cause me to pay more to my employees by taking more money from me. Know what might? If the government stops the wild spending and borrowing so I don’t have to worry about paying 20% interest in 2014; if the government repealed the health insurance bill so my costs for that don’t increase to some level I can’t possibly figure out; if the government abandoned “cap and trade” so I don’t have to factor in the possibility of much greater business costs than I now have for everything requiring energy; if the government announced that it was not going to impose any new, onerous tax rules on me like the $600/1099 requirement; if the government actually tried to rein in the unfunded entitlements it tosses around to its partisans like penny candy at a homecoming parade. Those things might actually cause me to think it might be a good idea to exert greater efforts to retain employees and hire new ones and buy new machinery and factory facilities.

This whole “tax the rich” thing is absolutely irrelevant to any rational economic approach. It’s just an appeal to class consciousness and stupid resentments. But even that “soak the rich” motif is a lie. This one-party government just finished voting a 26 billion dollar benefit to the teachers’, firefighters’ and policemens’ unions, and they did it by cutting foods stamps. If one wanted an exemplification that this government couldn’t care less about the “needy” and is totally devoted to vote-buying and paying off its partisan allies, one could hardly find a better one.

 

[edwest2]

This is not about anything Keynesian or any other economic theory. It Was Caused By Greed. Meanwhile, in Washington, big business, Congress and the Senate will be yelling at each other until the end of September. The issue from the Big Business side of the aisle?

“We want great big, humongous, retroactive even, tax breaks. We want you to dump capital gains. We want you to extend tax breaks for people making over 250 K. We want more, more, more. And yeah, it’s too bad people are out of work and are suffering but we gotta make a profit - a really big profit. You hear us?”

“Oh, and by the way, you got any of that TARP money left? We could use some.”

God bless,
Ed

 

[Good_News_1]

It’s just an appeal to class consciousness and stupid resentments.

Of course it isn’t. Upper income Americans are enjoying historically low tax rates. No one is even remotely seriously suggesting that marginal rates rise to the pre Reagan levels, which had been in effect at least since the New Deal. Income growth has gone disproportionately, by historical standards, to the top one percent.

That is the argument for increasing taxes on the wealthy. Because historically their taxes are low, and historically they are doing comparatively better.

Handing out free money, by increased spending and decreased taxes, is politically easy.

Being fiscally responsible and credible, by reducing spending and increasing taxes, is politically difficult.

We need to, for once, do the mature, responsible thing: cut spending and raise taxes. And the taxes should be raised on those who can most afford them.

 

[Ridgerunner]

Of course it isn’t. Upper income Americans are enjoying historically low tax rates. No one is even remotely seriously suggesting that marginal rates rise to the pre Reagan levels, which had been in effect at least since the New Deal. Income growth has gone disproportionately, by historical standards, to the top one percent.

That is the argument for increasing taxes on the wealthy. Because historically their taxes are low, and historically they are doing comparatively better.

Handing out free money, by increased spending and decreased taxes, is politically easy.

Being fiscally responsible and credible, by reducing spending and increasing taxes, is politically difficult.

We need to, for once, do the mature, responsible thing: cut spending and raise taxes. And the taxes should be raised on those who can most afford them.

I’m not saying there is no good argument for raising taxes. There certainly could be, in the right context and for the right reasons. But when it will only allow more wild spending on the part of a profligate government whose concern is to fatten the wallets of its supporters and force “social change” on the society, no argument suffices.

Strange as it might seem, and wrong as I might be, I really do think that if the government made a clear appeal to the citizenry; stating that it would greatly reduce spending down to an (honest) point certain; that it would stop trying to manipulate constituencies with it, but that the known and largely unavoidable shortfalls in things such as defense, infrastructure, SS and Medicare, even aid to the truly needy (which it ignores) had to be funded by additional taxation, I doubt a majority would oppose it, even among those who had to bear the greatest part of the burden. I think the majority of Americans are much better people than many, perhaps most, of those who govern.

But it has to be considered, too, that this current government, after all its shenanigans, has no credibility. I don’t know how it could ever persuade the populace, particularly those who it expects to be on the paying end, that there is any reason to believe its protestations. My goodness, it already announced (after the giant “stimulus bill”) that it “would be a good boy now”; that it would be “pay as you go”. But it hasn’t been. The government says it will do one thing, but does another, trusting that we’re all too stupid or too greedy for government largesse to see it.

This government could give it a try, though. So far, it hasn’t. In my opinion, it hasn’t done it because the ruling party has no more belief in honest fiscal responsibility than it has in Martians. Maybe less. In November, and particularly in 2012, the Democrats will once again try to “buy off” a sufficient portion of the electorate with promises of favors extracted from the pockets of others. Hide and watch.

 

[Good_News_1]

I’m not saying there is no good argument for raising taxes. There certainly could be, in the right context and for the right reasons.

Right now, faced with the current deficit, are the circumstances right to let the Bush tax cuts expire? If your rationale is that you oppose the expiration because Democrats are in charge, your position isn’t really conditional on anything, because if the Republicans were in charge, they would be extended (needlessly, in your view). Heads they stay, tails they stay.

But it has to be considered, too, that this current government, after all its shenanigans, has no credibility.

The government has a much credibility as one would expect, given the state of the economy. It has applied the usual toolbox of economic fixes. It has passed the bills that it would be expected to pass, and scaled back in light of political realities. It hasn’t engaged in any particular “shenanaigans,” certainly not in comparison to the Bush administration, who handed us the current tax dilemna, presenting unsustainable tax cuts as free money using the gimmick that they would expire in ten years. The credibility bar has been set pretty low, and Obama certainly hasn’t crawled beneath it.

 

[Ridgerunner]

Right now, faced with the current deficit, are the circumstances right to let the Bush tax cuts expire? If your rationale is that you oppose the expiration because Democrats are in charge, your position isn’t really conditional on anything, because if the Republicans were in charge, they would be extended (needlessly, in your view). Heads they stay, tails they stay.

The government has a much credibility as one would expect, given the state of the economy. It has applied the usual toolbox of economic fixes. It has passed the bills that it would be expected to pass, and scaled back in light of political realities. It hasn’t engaged in any particular “shenanaigans,” certainly not in comparison to the Bush administration, who handed us the current tax dilemna, presenting unsustainable tax cuts as free money using the gimmick that they would expire in ten years. The credibility bar has been set pretty low, and Obama certainly hasn’t crawled beneath it.

Re: Your first point. You shot the straw man right between the eyes. The only problem is, that is not my position. I didn’t say it was. Nor is it.

The “current tax dilemma”??? What’s the dilemma? Raise them or not. That isn’t a dilemma, it’s a decision. Just because raising them may have negative consequences now, does not mean lowering them had negative consequences when adopted.

Nor are any possible negative consequences of raising taxes on the “rich” (high earners actually, not the truly “rich”) the only problem this government has created for the economy. That’s not the only thing, by far. It isn’t even the biggest thing.

It really is laughable to suggest that the lowering of tax rates, in and of itself, caused the gargantuan deficits this government is now rolling up. I had a lot of problems with Bush myself, but even during the Bush years, it was not like this, and there were two wars going on. Do you really think Bush foresaw 911 like some of the nutcases out there maintain? But I guess the "Bush cuts favoring the rich caused the deficit to balloon AFTER he left office and AFTER all the Obama spending and borrowing programs. That’s simply irrational.

As I said before, I think the American people, including high earners, could live with a tax hike if it was evident that the government would, in the course of it, become fiscally responsible; perhaps even increasing benefits for the truly needy. But there is no reason at all to believe this government will do that. All evidence is to the contrary.

What they’re really doing is attempting to build a constituency of permanent Democrat voters and donors by giving subsidies to government workers and non-government workers who make up to $88,000/year. And they don’t care how they do it. The truly needy? Well, they can eat cake. Not enough votes there, and certainly no political contributions.

If you see no “shenanigans” in things like the Louisiana Purchase and the Cornhusker Kickback and the abortion pea-and-shell game in the healthcare bill, and none in the Medicare reduction that made the numbers work, but which won’t really happen, and “paying for” the 26 billion public employee bailout by reducing food stamps, which won’t really happen either, all the while burdening the very same school and medical systems by encouraging illegal immigration, or passing a “financial reform” bill that permanently subsidizes “too big to fails” yet ignores the major causes of the “housing bubble” (FNMA and FHLMC) and none in a government that increased its subsidies to FHLMC and FNMA to buy and encourage even worse loans than before, (which they’re doing) then I truly don’t know what anyone would consider a “shenanigan”.

But you know what? What if this government really keeps its promises to reduce Medicare and food stamps in order to subsidize the middle class and the civil service unions? What if it does? Does anybody with an ounce of “social justice” in his head think that’s what the government should be doing? Does raising taxes on high earners really make up for that?

 

[Black_Rose]

This appears to be the lynchpin of your argument; that higher taxes on investors are good because such people will then spend more on their employees since they can’t keep the money anyway.

No, it most certainly is not the lynchpin of my argument(s), since I presented three mostly disparate points against the notion that tax cuts, in the macroeconomic environment, will lead to more employment/ higher wage growth. Point one, which you alleged to be my lynchpin, was an insight “plagiarized” from Henry CK Liu, which Liu admits that it is counterintuitive. Point two was an empirical observation, that despite the Bush tax cuts, the economic cycle of the Bush Administration, from peak to peak (I accidentally said trough to peak) provide the lowest annual rate of job growth when compared to all other economic cycles. Point three was an admission from Paul Craig Roberts that supply-side prescriptions would most like not work in this macroeconomic environment. I do believe that point three was the most relevant to the question whether tax cuts would increase employment/ wages. Roberts points out that supply-side economics were a remedy to a Keynesian oversight that leads to worsening Phillips Curve trade-offs (i.e. one would need more inflation to generate an equivalent unit of employment). Given the immense deflationary pressure of the current macroeconomic environment, I fail to see how a worsening Phillips Curve trades of higher inflation for a unit of employment are relevant.

Aside from the fact that no persuasive evidence (or any at all) is offered to bolster this central assertion, it’s about as counter-intuitive as I, at least, can imagine. Since income is never (at least not yet) taxed at 100%, employers and investors would have the very opposite incentive. If, say, my marginal rate is 35% and it goes to 40% on an additional, say, $50,000 of income, I will still get to keep 60%, or $35,000 of it. (net loss from the change: $2500) If I give the $50,000 to my employees, I will get to keep 0% of it. (net loss: $50,000).

The argument is indeed counterintuitive, but it at least seems plausible and consistent with macroeconomic data when expiated upon.

Perhaps, the marginal impact of increased taxation on employment/benefits are quite low at the 35-40% level. For example, price elasticity of demand is the rate which demand for given item changes divided by the change in the price of the item. If a price of good rises, then it would be expected that demand would correspondingly decrease in the case of most goods; how demand would be affected would obviously depend on its elasticity. On an individual level, a decrease in demand for an item would probably not result due to a small increase in price, but one would expect a discernible drop in demand on a macroeconomic level since a small number of people responded to the change by decreasing their demand. Furthermore, elasticity, in most cases, is not a constant at all levels, resembling the function of a simple slope, but changes at different price levels.

Just because it is not a strong phenomenon for you does not mean that an increase in taxation would not have a beneficial effect on benefits/employment throughout the economy. Perhaps, the marginally effect is low at the 35-40% level and will have a higher marginal effect at higher levels as shown with the explanatory definition of price elasticity as an example.

 

[bbarrick8383]

Point two was an empirical observation, that despite the Bush tax cuts, the economic cycle of the Bush Administration, from peak to peak (I accidentally said trough to peak) provide the lowest annual rate of job growth when compared to all other economic cycles.

I would tend to think that job growth at full employment would be a bit low.

A person whose able to keep more of his money has more than one way to create jobs with that money. Whether it be his own need of labor, or the need of a product.

Personally, to see someone who obviously has some smarts, advocate that government should raise taxes for the benefit of the people is sad. As a blue collar worker, I want my local companies to keep as much money as possible, it gives me a direct avenue to pursue that money. Once the government takes it, take their “fair share” and redistributes the rest of that money there is no telling how much is going to be left nor will there be an option there for me to work for that money.

 

[Ridgerunner]

No, it most certainly is not the lynchpin of my argument(s), since I presented three mostly disparate points against the notion that tax cuts, in the macroeconomic environment, will lead to more employment/ higher wage growth. Point one, which you alleged to be my lynchpin, was an insight “plagiarized” from Henry CK Liu, which Liu admits that it is counterintuitive. Point two was an empirical observation, that despite the Bush tax cuts, the economic cycle of the Bush Administration, from peak to peak (I accidentally said trough to peak) provide the lowest annual rate of job growth when compared to all other economic cycles. Point three was an admission from Paul Craig Roberts that supply-side prescriptions would most like not work in this macroeconomic environment. I do believe that point three was the most relevant to the question whether tax cuts would increase employment/ wages. Roberts points out that supply-side economics were a remedy to a Keynesian oversight that leads to worsening Phillips Curve trade-offs (i.e. one would need more inflation to generate an equivalent unit of employment). Given the immense deflationary pressure of the current macroeconomic environment, I fail to see how a worsening Phillips Curve trades of higher inflation for a unit of employment are relevant.

The argument is indeed counterintuitive, but it at least seems plausible and consistent with macroeconomic data when expiated upon.

Perhaps, the marginal impact of increased taxation on employment/benefits are quite low at the 35-40% level. For example, price elasticity of demand is the rate which demand for given item changes divided by the change in the price of the item. If a price of good rises, then it would be expected that demand would correspondingly decrease in the case of most goods; how demand would be affected would obviously depend on its elasticity. On an individual level, a decrease in demand for an item would probably not result due to a small increase in price, but one would expect a discernible drop in demand on a macroeconomic level since a small number of people responded to the change by decreasing their demand. Furthermore, elasticity, in most cases, is not a constant at all levels, resembling the function of a simple slope, but changes at different price levels.

Just because it is not a strong phenomenon for you does not mean that an increase in taxation would not have a beneficial effect on benefits/employment throughout the economy. Perhaps, the marginally effect is low at the 35-40% level and will have a higher marginal effect at higher levels as shown with the explanatory definition of price elasticity as an example.

I understand all of this, and I understand there are lots and lots of economic theories that say this or that about taxes.

But that’s all still tangential to the problem I think I see with this government’s actions, which is the discouragement it gives to business and job development with virtually everything it does and with every “trial balloon” it sends up from time to time. Increasing taxes on people who might otherwise use the money for expansion is but one of them, and might even be one of the least important ones. It’s just part of a bigger mosaic of discouragement.

 

[Black_Rose]

I would tend to think that job growth at full employment would be a bit low.

A person whose able to keep more of his money has more than one way to create jobs with that money. Whether it be his own need of labor, or the need of a product.

Personally, to see someone who obviously has some smarts, advocate that government should raise taxes for the benefit of the people is sad. As a blue collar worker, I want my local companies to keep as much money as possible, it gives me a direct avenue to pursue that money. Once the government takes it, take their “fair share” and redistributes the rest of that money there is no telling how much is going to be left nor will there be an option there for me to work for that money.

I never used the term “fair share” since I believe it to be arbitrary; I tend to articulate my dissent against the economic status quo in utilitarian/communtarian moral terms, while I primary rely on empirical data.

Actually, while the through (defined by NBER being in December 2001) was indeed milder for the early 2000s recession, it took longer for it to return to the level of employment at the peak (March 2001). Because of this, it is not surprising that the annualized job growth rate was abysmally low at 0.6% for the six and three-quarter year period between March 2001 and December 2007. There was a reason why the early 2000s “recovery” was colloquially referred to as a “jobless recovery”.

1.bp.blogspot.com/_pMscxxELHEg/SsdKai2JmWI/AAAAAAAAGgM/69Fd8pPGr0s/s1600/2007Revised.jpg

calculatedriskblog.com/2009/10/comparing-employment-recessions.html

 

[Good_News_1]

Re: Your first point. You shot the straw man right between the eyes. The only problem is, that is not my position. I didn’t say it was. Nor is it.

Hmm. It seems my main point was to ask a direct question…Now, where is it? Ah, here. I asked:

Right now, faced with the current deficit, are the circumstances right to let the Bush tax cuts expire?

Seems like a pretty simple question.

And I specifically noted one cop out response: that it might be, but not while Obama is President. Because you know, I know, my seven year old knows, and my dog probably knows that if the Republicans were in power, the tax cuts would be extended. So, you may as well just be straightforward and say “never.”

Did I get an answer to the question? Hmmm…I see here, “straw man”…diversionary indignation this, laughable that…Obama “shenanagins”…certainly NOT George Bush’s fault, perish the thought…hard to tell. Wait, here it is!

As I said before, I think the American people, including high earners, could live with a tax hike if it was evident that the government would, in the course of it, become fiscally responsible; perhaps even increasing benefits for the truly needy. But there is no reason at all to believe this government will do that. All evidence is to the contrary.

So, the answer is: “under no circumstances that could exist in reality.”

What was the point of all the window dressing then, all the indignation and hyperbole? Your answer is that the tax cuts should NOT expire if the people who WILL let them expire are in office, and that they SHOULD (possibly) expire if the people who will NOT let them expire are in office. We already went over that.