Presidential election, 2016

[Odin]

(01-10-2017, 09:22 PM)Warren Dew Wrote:

(01-10-2017, 05:53 PM)Odin Wrote:

(01-10-2017, 11:16 AM)Warren Dew Wrote:

(01-10-2017, 08:02 AM)Odin Wrote:

(01-09-2017, 03:36 PM)Warren Dew Wrote: What Eric really objects to is classical liberalism, which does mean he and I are almost diametrically opposed.  I think he's purposely obfuscating the differences between classical liberalism and neoliberalism because he actually approves of those parts of neoliberalism that aren't part of classical liberalism.

Eric seems to conflate mainstream conservative neo-classical Monetarists like Friedman with the Austrian School wackjobs.

I think he conflates everyone on the right and center; it's more than just monetarists and the Austrian school.

For example, I figured out what I probably said that he interpreted as Reagan introducing me to classical liberalism.  It was probably a statement to the effect that Reagan's success caused me to believe that supply side policies worked.

The thing is, supply side policies are neither monetarist nor Austrian school.  They're a form of fiscal intervention, not monetary intervention; the most common forms are in fact fundamentally Keynesian, albeit not neokeynesian.  And Austrians, of course, think any form of government intervention is a bad idea.

So it's easy to have been introduced to classical liberalism when I was 13, but not credit supply side policies until I was 24, and not actually understand how supply side policies work until 40 or so, and regard Austrian economics as a curiosity until I figured out what they were actually saying at 50 or so.  But Eric can't grok that, because he can't bring himself to understand that they are all different things.

Which is a pity, because if Eric did understand them, even if he didn't change his political views, he'd still be able to make more interesting arguments against each of them.

Wait "supply-side theory" is a credit theory? I thought it was a claim that supply was more important than demand as a limit to economic growth, which is why it is considered BS on the left since the demand side has been dominant since the Industrial Revolution? I always hear it claimed to be a mere justification for cutting taxes on the rich.

Sorry, "credit" is being used as a verb in that sentence.  To put it another way, I dismissed supply side policies until I was 24 and had seen them work.

But no, it's not a claim that supply is more important than demand, and it's definitely not a justification only for cutting taxes on the rich; that's propaganda from the left.

Here's a simple introduction.  There are several ways for the government to stimulate the economy.  One is monetarist stimulus, where the central bank prints money.  The other is Keynesian fiscal stimulus, where the government runs a deficit (and it's assumed that the central bank covers the deficit).

We'll ignore pure monetary stimulation for now, and just look at fiscal stimulus.  It involves running a deficit.  Keynesian theory says it doesn't matter how the government runs the deficit.  From a practical standpoint, the government can run a deficit in two ways:  it can increase spending, or it can decrease taxes.

If the government runs the deficit by increasing spending, it is stimulating demand - the spending is demand for goods and services - and so that's demand side fiscal stimulus.  If the government runs the deficit by decreasing taxes, it is stimulating supply - the decreased taxes decrease the cost of supplying goods and services - so that's supply side fiscal stimulus.

Supply side economics is about what the consequences of supply side stimulus are, and how they differ from demand side stimulus.  For example, demand side stimulus is inflationary and supply side stimulus is deflationary, which has implications for when they are most appropriately used and how they are most appropriately coordinated with monetary policy.

The purest forms of supply side tax cuts are for everyone who pays taxes:  examples are the Bush tax rebates of 2001 and the bipartisan temporary Social Security tax cut from 2011-2012 inclusive.

The whole "for the rich" thing is a red herring that is pushed by various factions for political reasons unrelated to economic theory.  The left pushes it to try to prevent the use of supply side stimulus since they'd rather have demand side stimulus to increase the size of government.  And certain segments of "the rich", specifically investors, push the myth that it's about capital gains tax cuts because they want the right to focus the tax cuts on their taxes rather than on taxes on the general population.

Thanks!