Nobel Laureate calls for steeper tax cuts

[MisterMike]

http://story.news.yahoo.com/news?tmpl=story&cid=1521&e=9&u=/afp/nobel_economics_us_taxes

WASHINGTON (AFP) - Edward Prescott, who picked up the Nobel Prize for Economics, said President George W. Bush (news - web sites)'s tax rate cuts were "pretty small" and should have been bigger.

"What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.

"Tax rates were not cut enough," he said.

Lower tax rates provided an incentive to work, Prescott said.

Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.

The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve (news - web sites) Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.

But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.

The article did not say just WHO should have had bigger cuts, for instance people who make under 200,000 or more such as corporations. I would assume he meant the worker bees by the comment in bold.

Interesting...

 

[RandomPhantom700]

who make under 200,000 or more such as corporations

Do you mean people who make under $200,000, or those with incomes of $200,000 or more such as corporations? They're kinda opposite ends of the economic spectrum, and I really couldn't tell which groups you were talking about with you using this phrase.

Incidentally, I thought that the tax cuts were supposed to increase consumption, as opposed to motivate people to work?

 

[michaeledward]

Odd how this Nobel Laureate economist doesn't mention the deficit and debt. Seems to me the tax increase in 1993 allowed the government to actually pay for what it was doing for the first time in 30 years or so.

So, what 'Service Relief' do you think we should be aiming for?

By the way, Welcome Back MisterMike .... missed you.

 

[MisterMike]

Do you mean people who make under $200,000, or those with incomes of $200,000 or more such as corporations? They're kinda opposite ends of the economic spectrum, and I really couldn't tell which groups you were talking about with you using this phrase.

I meant the worker bees making under 200,000.

Incidentally, I thought that the tax cuts were supposed to increase consumption, as opposed to motivate people to work?

I guess it could do both? :idunno:

 

[MisterMike]

By the way, Welcome Back MisterMike .... missed you.

Yes, I feel rested. Was away doin' lot's of training. Good to be back.

 

[MisterMike]

Another, if you didn't like the first Laureate:

F.A. Hayek
Nobel laureate economist
The Fatal Conceit, 1988:

“[Socialists] assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system. But if humankind owes its very existence to one particular rule-guided form of conduct of proven effectiveness, it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects. The dispute between the market order and socialism is no less than a matter of survival. To follow socialist morality would destroy much of present humankind and impoverish much of the rest.”

 

[Xequat]

I'm no Nobel Laureate, but I think that the problem with the debt is the increase in spending. I love tax cuts, I think that the more money I have, the more I will spend, thus improving the economy. But I wonder how much the government income changed as a result of the tax cuts and how much spending went up. I can't find those figures. I mean, maybe the tax cuts increased revenue, but Dubya saw it as an opportunity to spen more money. Anybody know these numbers?

 

[Ronald R. Harbers]

If tax cuts help us all, how about tax repeal?

 

[Xequat]

Hehe, that'd be nice. Well, at least for a few weeks until the roads fell apart and we had no police. Oh well, at least we'd have more stuff.

 

[Ronald R. Harbers]

User fees could keep the roads kept in condition. I mean repeal the income tax, state property tax and reduce the size of goverment to a managable level.

 

[Xequat]

Hehe, I'm sorry...I thought you might have been joking. I see what you're saying...Florida seems to be OK without the state income tax (of course, I don't live there, but my parents do). I'd like to try something like that because through fees instead of taxes, it would be run privately and government spending would go way down automatically becuase the IRS would not be as necessary, in theory. We might have to worry about monopolies, though. I still think some things should be funded through taxes, like transportation stuff, because toll roads are annoying, and of course military and police. Plus, if it were funded privately, wouldn't the amount spent by consumers be about the same anyway? If it takes a certain amount to run a road, then we caould pay it throught axes or we could pay the private company that builds/maintains ti, but wouldn't it be about the same amount? It might be possible, though.

 

[Ronald R. Harbers]

I am thoroughly convinced that private institutions can run things better, and at less cost, with more freedom and profit.

Some businesses will be natural monopolies. Such as Microsoft, because their products and so good and in demand. It is the duty of goverment to protect us from unfair monopolies.

 

[Xequat]

Good point. I guess there's less chance of corruption and PAC's messing everything up, too, if it's private. Plus, if you want to give a certain company or individual a break, it just comes out of your profits instead of making everyone who pays taxes pay for it.

 

[heretic888]

“[Socialists] assume that, since people had been able to generate some system of rules coordinating their efforts, they must also be able to design an even better and more gratifying system. But if humankind owes its very existence to one particular rule-guided form of conduct of proven effectiveness, it simply does not have the option of choosing another merely for the sake of the apparent pleasantness of its immediately visible effects. The dispute between the market order and socialism is no less than a matter of survival. To follow socialist morality would destroy much of present humankind and impoverish much of the rest.”

I'm no "socialist", but all that statement seems to say to me is:

"Well, because we have a tolerable economic system right now, we must NEVER CHANGE IT. EVER."

I personally find the view that human beings are incapable of improving current conditions as silly. This guy talks about "matters of survival", but clearly missed the class on evolution.

Shwah. Laterz.

 

[rmcrobertson]

Well, doesn't THIS just prove that very educated, brilliant people can be idiots.

The first and stupidest assumption is that capitalism, "just growed," that way because it had to, according to some set of assumed laws of human nature and God's plan which are never examined or questioned.

I might be willing to agree that the attempt to IMPOSE historical change deliberately seems to always turn out badly--but there are at least as many examples of this for the Right to worry about as anyone else--for example, we are at present attempting precisely to shove at least two countries into our mold, and arguably, "forward," into time. Incidentally, I'm swiping this point from good old Karl Marx and Ernst's Bloch's, "Non-Synchronism in Relation to Dialectics."

The last and stupidest assumption, though--and this from a guy who's spent his life studying economics!--is that we are helpless to change the instituitions that we ourselves created.

 

[Xequat]

Typical. You accuse a brilliant, educated person of being an idiot, then use another brilliant, educated person (Karl Marx and Ernest Bloch) to back up your claim.


Capitalism is not based on theory; it is based on observation, which makes it realistic, not idealistic. I've said it before and I'll say it again - people.....like......stuff. Period. Socialism and communism are too idealistic because they assume that everyone will contribute according their ability. I've seen some people in our capitalist society who are actully rewarded for their contributions still being lazy. Just think how lazy they'll become if someone else does all the work and their income doesn't change according to how much work they do. More people will claim that their needs have increased. "Oh, my back hurts...I can't work any more."

Heretic888, I agree with you to an extent. We should always try to improve our situation. But we did improve it when we left England. The thing about survival has nothing to do with ability to survive or evolve. Sure, we can make it, but why just make it when we can live it up and have big TV's and eat steak instead of bread, just by working more?

 

[PeachMonkey]

I am thoroughly convinced that private institutions can run things better, and at less cost, with more freedom and profit.

If, as Robert put so eloquently in a different thread, you feel that money matters and people don't, I think you may be getting somewhere.

(Although, actually, private institutions show the same kinds of waste, overruns, corruption, lies, manipulation, and cheating that you see in any beauracracy-- you just don't hear as much about it from the corporatist spin machine. So I take that back.)

I prefer to aspire to something more. You know, like, not throwing away the societal advances that we've struggled millennia to develop.

 

[rmcrobertson]

When otherwise-intelligent people with icons of nose-pickers can't recognize obvious self-deprecating irony, so busy are they to shut out ideas contrary to theirs, I calls it prima facie evidence of ideology at work.

But then, I'm basing that on observation. And speaking OF observation, let's talk about, "systemic observational error." That's the sort of thing that you see when peopl operating from within a cultural/ideological bias grounded on an economic system start arguing that their economic system is, "biological," and "eternal," and, no doubt, "gorunded in God's plan," when in fact all they're doing is repeating the self-justification for capitalism that's been drummed into them from infancy. Dr. Commie recommends a double helping of Rowdy Roddy Piper in "They Live."

And then too, "idealism?" Now that's comedy--you're worshipping as necessary an economic system grounded on swapping around pure symbols, but I'M idealistic? You're relying upon an untested and untestable assumption that human beings are NATURALLY greedy, and I'M idealistic? You're postulating that, "big TVs," and "steak," are the pinnacle of existence, and I'M the silly guy? Dr. Commie prefers his fantasies to yours, thank you.

Dr. Commie also recommends the new French book, "Bonjour, Paresse," a detailed manual on how to screw off in corporate culture. It's perfectly symptomatic of capitalist ideology--which is precisely what causes the "screw you," attitude you mention--and an excellent guide to popular rebellion against the likes of George Bushes and the rest of the rah-rah for capitalism, I'm wealthy and you're screwed crowd.

 

[heretic888]

*shrugs* Personally, I would prefer a healthy balance between Capitalism and Socialism. I think both are rather dangerous extremes.

I think capitalism emerged historically as a natural result of growing middle classes (not to mention the industrial revolution), but in no way do I believe it was "pre-ordained", "predestined", or "inevitable". Evolution just doesn't work that way.

However, I think the world is now undergoing another global adaptation. We are clearly moving from an industrial-corporate complex into an informational-network complex. As such, new systems and laws must be established to govern this adaptation. It is inane to claim that the current system, intended to manage the industrial complex, is somehow perfectly, unerrantly suited for the informational.

Laterz.

 

[Ronald R. Harbers]

Peachmonkey: People do matter to me and so does money. It is the type of economic system we have. No man or group should have to right to be compensated for the product of another mans mind or the work he does with his own hands. I just think people should own themselves and be responsible for their actions. I don't need government to control all of my life. I need government to protect my rights and privileges as long as my right to freedom does not interfere with another individuals rights.

Robert: I do not understand what you are saying. You're too deep.