SoftBonds
Posts: 862
Joined: 2/10/2012 Status: offline
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quote:
ORIGINAL: Musicmystery quote:
What we see now in the Republican party is an angry backlash over civil rights, the woman's movement, receding American exceptionalism, and the realities of the Vietnam War. The hubris of neo-cons in IRAQ war was to reestablish American power and exceptionalism (on the cheap) in a region with inherently hostile and different from the West. The whole plan was thought up in a bubble. And an angry backlash against the New Deal. The Teas aren't so well versed--they just believe cutting taxes will solve all our problems. Amusingly, there may be some justification to the laffer curve, it is just that folks forgot about the economic science behind it and decided all tax cuts were good. What the laffer curve said was there was a tax rate that maximized tax revenues, and that a higher tax rate lowers revenues by discouraging growth. However, we are far below that rate, so tax cuts will lower tax revenues, and drive us deeper into debt. That debt will suck capital out of the system, which will depress economic growth, which will further lower tax collections-deadly spiral. Once our economy is humming, letting the bush tax cuts expire will add about 100 billion a year in tax collections, which will reduce the deficit and provide more capital to the market, which will stimulate growth... If your tax rate is on the left side of the optimum on the graph of the laffer curve (taxes too low), the solution is just as obvious as it is when your rate is on the right side of the graph (taxes too high). Now of course the question is, where is the optimum on the laffer curve? Well, the answer to that question is actually best answered by psychology. At what tax rate do YOU stop earning money out of a desire to spite the government? More seriously, looking at the current market, is it lack of consumers or lack of capital which is slowing the economy? Given that the capital market is investing in derivatives and commodities rather than in expanding companies, I think that answer is obvious. As long as companies are not complaining about lack of access to capital, tax rates on the rich are not slowing economic growth...
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Elite Thread Hijacker! Ignored: ThompsonX, RealOne (so folks know why I don't reply) The last poster is often not the "winner," of the thread, just the one who was most annoying.
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