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Giving up on Kansas so soon? I would run away from the OP too, were I dumb enough to have drank that Koolaid.
If you think you have got something better, by all means.
Pretty much.
The problem is the tax cuts. They didn't do what they were advertised to do.
Giving up on Kansas so soon? I would run away from the OP too, were I dumb enough to have drank that Koolaid.
If you think you have got something better, by all means.
Can't see it.
I would point out that the server refuses connections if you aren't logged in.
When I paste the URL into a browswer I get this:
You must be logged-in to do that.
Laffer is.
The people who try to translate the Curve into public policy... not so much.
No, it doesn't.
How so? The objective was to grow the economy. They did that.
https://voxrationalis.wordpress.com/...peter-ferrara/
“Yawn.”Peter Ferrara has been revising Reagan’s economic history for a long time; perhaps he started when he worked in Reagan’s Office of Policy Development. That administration did very well selling its prescriptions back then. But I don’t trust sales people.
Ferrara’s May 5 piece led “Reaganomics Vs. Obamanomics: Facts And Figures” is another example of partial and misleading data patched together to create an apparently convincing argument that Reagan’s policies were the best thing since aspirin. Let’s look closer.
“When President Reagan entered office in 1981, he faced actually much worse economic problems than President Obama faced in 2009.” Really? Much worse?
“Three worsening recessions starting in 1969 were about to culminate in the worst of all in 1981-1982, with unemployment soaring into double digits at a peak of 10.8%.”
Unemployment didn’t peak until Reagan had been in office 22 months. If Ferrara does not assign to Reagan responsibility for rising unemployment nearly two years into his presidency, shouldn’t he give Obama the same treatment? Does Ferrara give Obama a pass on everything that happened during his first two years in office?
At the same time America suffered roaring double-digit inflation, with the CPI registering at 11.3% in 1979 and 13.5% in 1980 (25% in two years). ”
Here Ferrara has a point. The damage to an economy of persistent and unpredictable inflation cannot be understated, and this fact alone made the 1981 economy awful. Unpredictable inflation is pernicious, infecting every economic decision that has a time element.
EXCEPT: inflation was not broken “at the same time” as the recovery. Breaking inflation was necessary before the recovery could take hold. This is why there’s a gap between the 1980 and the 1981 recessions; the Fed eased off on the contractionary monetary policy too early.
Ferrara’s using inflation data from before Reagan was president and unemployment data from two years later. When unemployment peaked, inflation was already down to 4.5%. Just wait – I bet Ferrara tries to give Reagan credit for falling inflation during 1981 while blaming rising unemployment on Reagan’s predecessors.
“The poverty rate started increasing in 1978, eventually climbing by an astounding 33%, from 11.4% to 15.2%. “
That peak was in 1983, Reagan’s 3rd year in office. But this discussion is about how bad the economy was when Reagan entered office, compared to Obama. The poverty rate was 13% in 1980. In 2008, it was 13.2%.
“A fall in real median family income that began in 1978 snowballed to a decline of almost 10% by 1982. “
Not sure where Ferrara’s getting this data, but here’s what I found in Census Bureau data: real median family income peaked in 1979, then in Reagan’s election year declined 3.4%, then continued to decline through Reagan’s first two years in office, for a total decline was 7.3%. Compare with Obama: it peaked in 2007, then declined 3.4% in Obama’s election year. It will be interesting to see what happened in the first two years of Obama’s presidency.
“…total federal spending declined from a high of 23.5% of GDP in 1983 to 21.3% in 1988 and 21.2% in 1989. That’s a real reduction in the size of government relative to the economy of 10%.
Ferrera doesn’t mention that 1983 marked the highest spending as a percentage of GDP since World War II, nearly 10% higher than any year prior to Reagan. He also doesn’t point out that this figure is always high during recessions. Kind of like how it was 25% in 2009 because of the financial crisis and recession. This isn’t a bad thing! This shows that our government has sufficient financial flexibility to step into the economy when needed.
“These economic policies amounted to the most successful economic experiment in world history. The Reagan recovery started in official records in November 1982, and lasted 92 months without a recession until July 1990, when the tax increases of the 1990 budget deal killed it.”
Here Ferrara’s claim is that the prospect of a tax increase caused a recession to begin. The law wasn’t enacted until November 1990, four months after the recession began. Interestingly, the recession ended four months after the law was signed; why doesn’t Ferrara connect the end of the recession to the tax increase?
“The shocking rise in inflation during the Nixon and Carter years was reversed.”
Yes – by Carter’s Fed Chairman.
“It was cut in half again for 1983, to 3.2%, never to be heard from again until recently.”
Until recently? Let’s see, the latest inflation data is… ah yes, April – 3.13% year-over-year. Ferrara here implies that 3.2% was low, but 3.13% is high.
“The contractionary, tight-money policies needed to kill this inflation inexorably created the steep recession of 1981 to 1982, which is why Reagan did not suffer politically catastrophic blame for that recession.”
Nonsense. All presidents’ approval ratings ride the economy. Reagan’s dipped below 40% during that recession, but rose with the growing economy to the high 50s by the 1984 election.
“…in 2013 the top two income tax rates will rise by nearly 20%.”
It’s worth noting another way of describing the same thing: the top rate would increase by 5.6%. Ferrara’s method of describing tax increases emphasizes their size in relation to the prior tax level, but says nothing about the actual tax rates involved. A tax from 1% to 2% is a 100% increase, but is not nearly as onerous as an increase from 10% to 15%.
This is partly because the Republicans keep pushing the balanced budget as a critical priority during a time of economic hardship. Economists of all stripes agree that this is not a prescription for growing thPresident Obama proposes still more tax increases.
Instead of coming into office with spending cuts, President Obama’s first act was a nearly $1 trillion stimulus bill.
Which is not altogether unlike Reagan’s expansion of the federal budget while cutting tax revenue.
“…his 2012 budget proposes to increase federal spending by another 57% by 2021.”
Let’s see, and between Reagan’s first budget for 1982 and last for 1989, spending increased by 53%. And that was without the projected increases in the elderly population and health care costs that continue to drive spending necessarily higher.
“His monetary policy is just the opposite as well. Instead of restraining the money supply to match money demand for a stable dollar, slaying an historic inflation, we have QE1 and QE2 and a steadily collapsing dollar, arguably creating a historic reflation.”
What “historic inflation”? Where exactly is this inflation that Ferrara says should have been “slain”? Inflation for Obama’s first two years was just over 2% annually. Regarding Ferrara’s prescription of “restraining the money supply to match money demand,” perhaps he’s never read Friedman’s discussion of the causes of the Great Depression.
I’d wager Bernanke knows a touch more about it than does Ferrara, and his actions have been proven right by two-and-a-half years of fairly stable prices — could the unprecedented expansion of the Fed balance sheet have happened without significant inflation if Ferrara was right and Bernanke wrong?
And instead of deregulation we have across-the-board re-regulation, from health care to finance to energy, and elsewhere. While Reagan used to say that his energy policy was to “unleash the private sector,” Obama’s energy policy can be described as precisely to leash the private sector in service to Obama’s central planning “green energy” dictates.
Now Ferrara’s veered off into delusional ramblings. Health care – Ferrara would like readers to forget what’s happened to health care costs over the last decade, and to think that the free market has worked great in that unique industry. Finance – does Ferrara think that appropriate regulations couldn’t have had an impact in preventing the 2008 financial meltdown? Energy – weeks before the Macondo well accident, Obama was talking about opening new areas of the outer continental shelf to drilling. Once the disaster in the gulf started, that became a political impossibility. A year later, with the images of oil streaming out of the blowout preventer fading, Obama is once again talking about increasing domestic production.
“Based on the historic precedents America should be enjoying the second year of a roaring economic recovery by now, especially since, historically, the worse the downturn, the stronger the recovery. ”
So, which of the other post-WWII recessions was caused by a near-complete collapse credit markets? None? Oh.
“Yet while in the Reagan recovery the economy soared past the previous GDP peak after six months, in the Obama recovery that didn’t happen for three years. ”
Often, the recessions of 1980 and 1981-2 are counted together, since the space between them was so short and the root cause (Volcker’s Fed wringing inflation out of the economy) was the same. The economy was essentially stagnant between the beginning of 1980 and the end of 1982. The recent peak was in Q3 of 2007, and as in the early 1980s, the economy regained that peak level of real GDP three years later, in Q3 of 2010.
But this is all jibber-jabber. The two recessions are so fundamentally different that comparing them is a waste of time. Unless one’s trying to score political points and rewrite history.
“Last year the Census Bureau reported that the total number of Americans in poverty was the highest in the 51 years that Census has been recording the data.”
In his zeal to make an argument, here Ferrara serious errs. Why do you suppose he uses the TOTAL number in poverty, rather than the PERCENT in poverty? Because the population is more than 30% higher in 2009 (year of the latest poverty data) than in 1983. Compare the poverty rates: 2009 – 11.1%, 1983 – 12.3%. It took three years of the “Reagan recovery” for poverty to fall to the peak level of 2009.
“Moreover, the Reagan recovery was achieved while taming a historic inflation…”
No. The “Reagan recovery” was achieved following the taming of a historic inflation. The recession didn’t end until the Fed was convinced inflation was finished and ended its contractionary action.
“…the less-than-half-hearted Obama recovery seems to be recreating inflation, with the latest Producer Price Index data showing double-digit inflation again, and the latest CPI growing already half as much.”
Similar price increases occurred in mid-2008, when commodities and commodities rose dramatically, with oil topping off at $147/bbl. Consumer inflation did not follow. As Ferrara knows, this is why core CPI is used by forecasters for to predict future inflation. Is Ferrara scaremongering or ignorant?
Ferrara’s truly adept at being selective with data that support his worldview while excluding data that would refute it. I doubt I’ll be able to keep up this debunking for long, since Ferrara’s so prolific. But it’ll be fun while it lasts.
Yes it does. They need to cut $400 M in spending.
If the objective is to grow the economy, you can also break a lot of windows, and build a lot of bridges to nowhere.
In this case, the economic growth is even debatable.
What matters is if the policy has a benefit that is worth the cost. The massive budget hole, and cutbacks to education (human capital investment) and infrastructure required to pay for it...
Long term, this will shrink the Kansas economy, much more than a continuing investment in people and infrastructure.
You have no data to prove your assertion that isn't cherry-picked and actively misleading.
No, they don't need to cut spending. They need to get rid of the stupid tax cuts.
I can do this all night.
But hey.
I call bull .
How much did they grow the economy?
Define "grow" and how much.
Cite sources.
Unemployment decline, job growth up, wages up. Good things.
Also this:
http://www.forbes.com/sites/rexsinq....sperous-state/
State Department of Revenue Secretary, Nick Jordanreported this week that while total March tax receipts were $11.2 million below what was expected, individual income tax receipts were $8.7 million higher than expectation. Jordan stated, “While the monthly receipts show a temporary shortfall, sales and use tax receipts for the fiscal year to date are $40 million more than during first nine months of the prior fiscal year. I’m pleased to see individual income tax receipts $8.7million above what we expected, driven in part by strong employment growth.”
It's common sense. Unlike the liberal position that increased taxes grows the economy. That's a beaut of an argument.
Increasing student/teacher ratios directly decreases performance and vice versa.If spending is so important, and CUTS in spending directly result in poorer results, why is it that, as a country, education spending increases have outpaced inflation for a while now, yet test scores are falling? Causality should necessarily go both ways?
http://www.centerforpubliceducation....ch-review.html
CIf the Cato ins ute were interested in honesty and the truth, they would dig into a complex subject with a bit more evidence and a lot less simplification.lass size and student achievement: Research review
Reducing class size to increase student achievement is an approach that has been tried, debated, and analyzed for several decades. The premise seems logical: with fewer students to teach, teachers can coax better performance from each of them. But what does the research show?
Some researchers have not found a connection between smaller classes and higher student achievement, but most of the research shows that when class size reduction programs are well-designed and implemented in the primary grades (K-3), student achievement rises as class size drops.
Research findings
We identified 19 studies that met our standards. Most of these addressed reduced class size programs in grades K-3. Indeed, most programs in the past 20 years have targeted these early grades, in part because earlier research (see, for example, Glass and Smith 1978), suggested that these are the optimal years for such programs, and in part because of the more recent and comprehensive evidence from Tennessee’s influential Project STAR (Student/Teacher Achievement Ratio). (For more information on Project STAR, visit http://www.heros-inc.org/star.htm.)
From this review of the research, we can scientifically do ent several important findings about reduced class size, which local school districts may find useful:
Smaller classes in the early grades (K-3) can boost student academic achievement;
A class size of no more than 18 students per teacher is required to produce the greatest benefits;
A program spanning grades K-3 will produce more benefits than a program that reaches students in only one or two of the primary grades;
Minority and low-income students show even greater gains when placed in small classes in the primary grades;
The experience and preparation of teachers is a critical factor in the success or failure of class size reduction programs;
Reducing class size will have little effect without enough classrooms and well-qualified teachers; and
Supports, such as professional development for teachers and a rigorous curriculum, enhance the effect of reduced class size on academic achievement.
The following sections describe several reduced class size programs and examine the evidence.
- See more at: http://www.centerforpubliceducation.....vsvexCly.dpuf
And yes, causality should work both ways.
Do you think that, all things equal, a school system faced with budget cuts will dump teachers?
That is exactly what happened in Texas.
I refuse to base policy on your common sense.
"Common sense" said the sun went around the earth. Until we found out otherwise.
You have given me no reason to take your word for anything yet.
I can show increasing taxes grows the economy.
All one really needs is any study, such as one that details drug treatment programs, that provides a positive NPV.
There are dozens.
It isn't taxes per se, but what one spends it on. People matter.
And please, stop trying to make up "what liberals believe" You have no idea other than some stick-figure cartoonish version of what liberals think or believe.
http://icmpe.org/test1/journal/issue...3-011_text.pdf
Starters.The Journal of Mental Health Policy and Economics
J. Mental Health Policy Econ. 3, 11–26 (2000)
Cost–Benefit Analysis of Drug Treatment
Services: Review of the Literature†
YOu can move on to transportation spending and the studies noted here:
https://www.whitehouse.gov/sites/def...nvestments.pdf
AN ECONOMIC ANALYSIS OF
TRANSPORTATION
INFRASTRUCTURE
INVESTMENT
Goes through a fair case for it.
http://www.cbo.gov/sites/default/files/91-cbo-011.pdf
Bit of an old study by the CBO, but worth reading. Interesting.
, take any good basic course on macroeconomics.
Conventional thinking in most economic classes is that taxes hurt job growth, but I think that you have to be careful in making 'absolute' statements about any economic policy. Historically, when taxes are high, cutting taxes can lead to job growth, but when taxes aren't high....and 36-40% is not historically high, cutting taxes won't typically lead to the job growth necessary to make up the revenue lost in taxes
Even if that would be the case, they clearly don't want to do that. They didn't want to do it when the tax cuts were enacted, and still don't want to do it now with the big hole in the budget.
They rather pillage other funds, or stop making pension fund payments (instead of actually trying to reform their pension system with actual cuts, which is, obviously, unpopular).
Reagan jacked up other taxes to make up the difference (which apparently now it's a 'liberal' policy), because there was no way in he was going to stop spending.
But if any modern conservative even suggests that, well, he's a "RINO"...
"Historically, when taxes are high, cutting taxes can lead to job growth"
How about the "history" in USA from 1945 - 1965 of job growth with very high taxes on the wealthy, a strong and growing middle class, and heavy investment, both private and public.
Qualifiers in that sentence are noted.
Fine, I'm OK with spending extra money on K-3 education when it can be shown that that money will be invested in programs that are both well-designed and implemented. That is if that extra achievement in those early grades actually translates to those same students continuing to achieve more in the later grades, and the gains are not simply lost by the time those high-achieving students graduate high school (9 years later).
I am satisfied with basing public policy on what the research, on balance, shows.
Perfect support is usually neither possible, nor really desirable from a cost standpoint.
We can however agree on this point. Part of the problem though, is that students performance in school is so strongly affected by what is going on outside of school, as my wife would readily attest.
If you want those gains locked in, you also need to follow them up, with other things that many regard as "welfare", and paint as wasteful, sans evidence.
What I wish were to happen was that both conservatives and liberals be given states to run with. We could end up taking the best ideas from both, even as dubious as I am with the idea that " them, let them starve" is really a policy solution that I could morally live with.
Modern, complex economies require modern, complex government.
The US spans an entire continent, and is one of the larger countries in the world. Sheer size would dictate that a common currency and economic union would require some degree of complexity.
I am all for keeping government as small as possible, but I differ with many as to what "as possible" means, especially when it comes to protecting ordinary people from the large corporations that would, and do so readily prey on individuals and smaller companies in unethical, if not outright illegal ways.
Pressure To Act Unethically Looms Over Wall Street, Survey Finds
http://www.npr.org/2015/05/19/408010...t-survey-finds
Another good example of large corporations acting unethically in ways that most would see require regulation: chicken farming.
For anybody who hasn't started watching John Oliver's show, you should. It is very smart, funny, and takes the news show format a lot farther than the Daily Show ever did. I have been solidly impressed with the depth and coverage he gives to his weekly topic.
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