Lets make fun of Obama while he is still relevant.

[Eric the Green]

(12-02-2016, 04:20 PM)Warren Dew Wrote:

(12-02-2016, 03:18 PM)Eric the Green Wrote:

(12-02-2016, 02:05 AM)Warren Dew Wrote: Actually government spending is the least effective way to try to stimulate the economy.  The problem is that spending stimulus is inflationary, which means that you have to cut back on monetary stimulus to avoid excessive inflation.

Why is monetary stimulus not inflationary, and spending stimulus is?

We're looking at three categories of stimulus here, not just two:  monetary stimulus, demand side fiscal stimulus (spending), and supply side fiscal stimulus (like tax rate cuts).  Monetary stimulus and demand side fiscal stimulus are both inflationary; supply side fiscal stimulus is deflationary.  For that reason, supply side fiscal stimulus and monetary stimulus are complementary and the best combination for stimulating the economy.

Quote:Tax cuts to the non-wealthy might have some stimulus benefit, but the resulting debt has its dangers too as I mentioned.

I agree that ideally, tax rate cuts should be targeted at wage earners and not capital owners.  For me, that's the "non-wealthy" since there aren't any billionaire wage earners; you may have a different definition.

Bush's early tax rate cuts combined with rebates were the perfect way to handle supply side stimulus, and managed to nip in the bud a 2002 recession that otherwise could have been as bad as the 2008 recession.

As for debt, we disagree, but I notice you never worry about the debt from demand side spending stimulus.

Quote:Except that the times when inequality vastly rose, were the years leading up to 1929, and the period from 1980 to today, when tax cuts were the policy.

Hoover tried to increase government spending to large corporations. That didn't work. Spending needs to be focused on direct benefits to the people and for the infrastructure the economy depends on.

The rise in inequality from 1980 to today, which included periods of tax increases as well as tax decreases, had nothing to do with taxes.  They had to do with two factors:  (1) High growth naturally results in inequality increases, because among players that were equal before the growth, there are winners and losers, and (2) massive immigration drove the price for labor - wages - down relative to capital.

Agreed regarding Hoover.  The same critique applies to Obama's stimulus spending.  "Infrastructure" spending is just an excuse for Hoover style giveaways to rich construction companies - a moment's thought about how real estate developers benefit from "infrastructure" spending should let you know all you need to know about why Trump supports infrastructure spending.  The best way to put money in peoples' pockets is tax rate decreases for wage earners, not spending.

Supply side is not inflationary, because it does not stimulate. If it stimulated, inflation would rise.

The non-wealthy is not limited to non-billionaires; millionaires are wealthy too, and those who earn $250,000 a year need to be taxed more than they are now. We agree that tax cuts should be targeted at wage earners. I disagree that it's the cure all. Lowering taxes on middle-income earners is part of a healthy mix of fiscal policy, and so is spending increases. But at all times the government needs money. You can't just keep lowering taxes and increasing the debt. The government provides the long-term foundation for society; without it we decline and we don't get the highways and bi-ways, the education, the new industries we need. For example, the space program was a government spending program that directly resulted in the high tech industries we have today.

I am concerned about the debt, but not when spending is needed for stimulus. During boom times restraint on the debt is needed.

The rise in inequality since 1980 had everything to do with tax decreases. That meant no correction for CEOs who raised their pay to 300 times more than their employees who did their work. These CEOs do not earn their money; they extort it. This gave the rich unparalleled power in our society, and they kept wages low for everyone. Their huge income should be redistributed, but that was against Republican trickle-down ideology. That's the biggest factor in the rise in inequality and poverty since 1980, but there are several other huge factors you didn't mention, but I have over and over: automation, cheap labor abroad, and the decline in unions fostered by GOP policy. The demand for labor is shrinking, so wages are falling. Since Reagan, Republicans have kept the minimum wage flat, which means it is far lower in adjusted dollars than in the 1970s. These are huge factors. Social conservatives can point to more women in the labor force too.

But NOT immigration! That's the clue that a conservative such as yourself is relying on the dog-whistle to blame other ethnic groups for their own troubles, and make political hay out of resentment toward people who are different or outside. Now Trump has put down the dog-whistle, and picked up the TRUMPet. Same idea, though. Stimulate the racism that's been at the heart of American society since the beginning, goes the plan. The USA was a slave society, and to a large degree has never stopped being one. Most immigration has come from poor folks; that does not drive down wages. They do work that doesn't pay well to begin with, and that wealthier people don't do anyway. Immigration stimulates the economy, and that's a net plus for wages, not a minus.

Real growth helps everyone, not a few winners. Gains vary, but it does not result in more losers. Only Reaganomics results in THAT. Reagan/Bush did not provide any growth for the economy, except for the rich. Remember what Rachel Maddow said so well: "The rich did GREAT! Everybody else? Still waiting for the trickle........"