Political Crossfire Forums

[Atlas Bergeron]

Iriemon wrote:

If the savings rate is around -0-, what is the basis for asserting that taxes leads to a comparatively small decrease in spending?
they lead to a comparitvely small (compared to the amount the government will spend) decrease in private sector spending. They do this becuase taxes come from the private sector, and if the private sector has less money, they will spend less.

Quote: Apparently they are not right, over the long term GDP growth has been no better with lower taxes.
do you mean over the period of five or six years?
There are numerous factors involved, all must be accounted for if we wish to experience a rapid growth in the GDP in the long run

1. Buisnesses must feel secure that the government will not destory what they have accomplished. therefore, all anti trust laws must be repealed
2. Taxes, both corporate and private must be significantly reduced and government spending and borrowing must be reduced to the basics
3. Trade must be allowed unrestricted in all forms which do not violate people's rights--both between states and internationally.

five or six years is hardly a "long run," especially when only one of the three conditions is met. Your evidence is null.

Quote: Quote: Quote: If the taxes takes money from one person who would have spent it and the Govt or another person spends it, there is a wash. If the person taxed would have saved the money and it is spend instead, then I'd agree there is an net increase in spending.
the government spends nearly all its money. People sometimes save money. Therefore if the government takes the money they would have saved, it will lead to an increase in spending. I am glad you agree.

How much is the decrease in spending given a savings rate of 0-5%.
just one question: what is the percentage savings rate of the government?

Quote: What happens to production when inventories build because there is insufficient demand?
why would they build when there is no demand? Such a thing would be absurdly non-profitable and if one were to do it they would go out of buisness.

Quote: What happens if the wealth doesn't exist to buy what is produced?
exactly, it must be produced. Wealth is not a static quantity. There will always be a demand for food, so generally an ecconomy that has gone completly bankrupt would start where history began--at agriculture. It would expand from there.

But when there is already capital available (i.e. if there is a sharp recession in an industiral ecconomy) then there will be alot of cheap capital for sale. Thus, if an extrodinarily sharp recession started, prices would go up, labor costs would go down, and capital would be cheap. A better situation to get rich has not occured since the great depression--and that chance was destroyed by government intervention (which, BTW, is exactly what this paper adressed). If the government hadn't stepped in, investors would have bought capital to produce goods, would have hired workers at extremly low wages, and would have produced at high prices. Other investors would enter the field, each trying to get rich, each hiring more workers, and each competing for a larger share of the market. This is the basic law of supply and demand in action, if you do not understand where I am going with this, you need to read up.

Quote: What is the point of arguing chicken or egg?
the point is that in ecconomics, one needs to come before the other. You cannot trade with the lepricon if he does not have a pot of gold.

Quote: You need both production and demand. I think you agreed that spending increases GDP. Why? Because when people buy stuff, that creates demand for more production.
this is true, but what is this "buy"? Where do they get the wealth to "buy"? They must either produce it or steal it. To steal it, they must take it from someone who has produced it. Thus, production must come first.

Really, this isn't a difficult concept. If you still don't understand, re-read it until you do.

Quote: Quote: Quote:
My point is that the relative importance of savings and investment in this country has not been sharp because of the availability of capital from foreign investors. The availability of capital ultimately affects the cost of capital, which is a key to long term investment and growth. The cost of capital has been relatively low in recent years. Inavailability of capital has generally not been a problem.
ok... and what is your point?

Because the cost of capital was already low and there has been sufficient capital for investment, there is nor reason to expect the recent tax cuts to provide marginally greater long term growth.
Two points
1. it depends on what we mean by "long term"
2. even if you are right, what about the other two variables? You have yet to account for them

(not that you have even come close to accounting for the first. If investment is indeed coming from foreign countries, then they need to produce as well in order to invest anything. There is no such thing as a free lunch.)

[Iriemon]

Atlas Bergeron wrote: Iriemon wrote:
Apparently they are not right, over the long term GDP growth has been no better with lower taxes.
do you mean over the period of five or six years?

50-60 years.
Quote:
There are numerous factors involved, all must be accounted for if we wish to experience a rapid growth in the GDP in the long run

1. Buisnesses must feel secure that the government will not destory what they have accomplished. therefore, all anti trust laws must be repealed
2. Taxes, both corporate and private must be significantly reduced and government spending and borrowing must be reduced to the basics
3. Trade must be allowed unrestricted in all forms which do not violate people's rights--both between states and internationally.

wow! A hard core laizzes-fairest.

Monopolies do not lead to higher GDP growth.

I would eliminate corporate taxes too. A corporate tax is at least to an extent a sales tax and makes the corp less competitive. Individuals who benefit should be taxed on their incomes not entities. The Govt should be running surpluses and paying down the debt. Agree on free trade.

Quote: five or six years is hardly a "long run," especially when only one of the three conditions is met. Your evidence is null.

I posted the average data from the 50s to today. How much longer term do you need?

Quote: Quote: Quote: Quote: If the taxes takes money from one person who would have spent it and the Govt or another person spends it, there is a wash. If the person taxed would have saved the money and it is spend instead, then I'd agree there is an net increase in spending.
the government spends nearly all its money. People sometimes save money. Therefore if the government takes the money they would have saved, it will lead to an increase in spending. I am glad you agree.

How much is the decrease in spending given a savings rate of 0-5%.
just one question: what is the percentage savings rate of the government?

Nil.


Quote: But when there is already capital available (i.e. if there is a sharp recession in an industiral ecconomy) then there will be alot of cheap capital for sale. Thus, if an extrodinarily sharp recession started, prices would go up, labor costs would go down, and capital would be cheap. A better situation to get rich has not occured since the great depression--and that chance was destroyed by government intervention (which, BTW, is exactly what this paper adressed). If the government hadn't stepped in, investors would have bought capital to produce goods, would have hired workers at extremly low wages, and would have produced at high prices. Other investors would enter the field, each trying to get rich, each hiring more workers, and each competing for a larger share of the market. This is the basic law of supply and demand in action, if you do not understand where I am going with this, you need to read up.

I already agree restricting the money supply was bad policy during the recession, I don't know if we clarified whether that was because of Govt decisions or the gold standard.


Quote: Quote: Quote:
My point is that the relative importance of savings and investment in this country has not been sharp because of the availability of capital from foreign investors. The availability of capital ultimately affects the cost of capital, which is a key to long term investment and growth. The cost of capital has been relatively low in recent years. Inavailability of capital has generally not been a problem.
ok... and what is your point?

Quote: Because the cost of capital was already low and there has been sufficient capital for investment, there is nor reason to expect the recent tax cuts to provide marginally greater long term growth.
Two points
1. it depends on what we mean by "long term"
2. even if you are right, what about the other two variables? You have yet to account for them

(not that you have even come close to accounting for the first. If investment is indeed coming from foreign countries, then they need to produce as well in order to invest anything. There is no such thing as a free lunch.)

So what does that have to do with US tax policy and whether the tax cuts are doing anything more than contributing to this country being trillions more in debt.

[Atlas Bergeron]

Iriemon wrote: Atlas Bergeron wrote: Iriemon wrote:
Apparently they are not right, over the long term GDP growth has been no better with lower taxes.
do you mean over the period of five or six years?

50-60 years.
has there ever been a period of fifth to sixty years with "lower taxes"?(other than the industrial revolution... which experienced gigantic economic growth.)

Not according to your data. It keeps on fluctuating
Quote: Quote:
There are numerous factors involved, all must be accounted for if we wish to experience a rapid growth in the GDP in the long run

1. Buisnesses must feel secure that the government will not destory what they have accomplished. therefore, all anti trust laws must be repealed
2. Taxes, both corporate and private must be significantly reduced and government spending and borrowing must be reduced to the basics
3. Trade must be allowed unrestricted in all forms which do not violate people's rights--both between states and internationally.

wow! A hard core laizzes-fairest.
Surprise!

Quote: Monopolies do not lead to higher GDP growth.
do you mean monopolies instituted by the government or monopolies which maintain thier prices by keeping lower prices than any and all competitors.

Two points.
1. The latter kind of monopoly has never really existed.
2. In short term ecconomics, cerebus paribus you are right. But we are not talking about the short term, and we are not talking about cerebus paribus. Buisness in a laize-fair (as well as a mixed) capitalist market requires innovation. Innovation shifts the entire GDP curve outward, drastically increasing GDP. Almost nothing is without change.

Its really quite simple, a monopoly must still compete (even if they are only imaginary competitors), and must therefore continue investing a significant percentage of thier resources in R&D and capital. Read the Wikipedia article on Rockefeller to find a real life example of how monopolies REALLY exist.

Quote: Quote: five or six years is hardly a "long run," especially when only one of the three conditions is met. Your evidence is null.

I posted the average data from the 50s to today. How much longer term do you need?
your data went back and forth between higher taxes and lower taxes. For all we know, the lower taxes could have had a delayed effect which made the high taxes looked good, or the high taxes could have had a delayed effect which made the low taxes look bad. Buisness investment does take time, and just becuase the government changes its mind every four years doesn't mean that investors can or will.

Quote: Quote: Quote: Quote: Quote: If the taxes takes money from one person who would have spent it and the Govt or another person spends it, there is a wash. If the person taxed would have saved the money and it is spend instead, then I'd agree there is an net increase in spending.
the government spends nearly all its money. People sometimes save money. Therefore if the government takes the money they would have saved, it will lead to an increase in spending. I am glad you agree.

How much is the decrease in spending given a savings rate of 0-5%.
just one question: what is the percentage savings rate of the government?

Nil.
actually, less than nill. They spend more money than they have, while the average person, as you say (although I don't know where your source is from) saves 0-5%. That would be more spending and less savings, no?
Does this not support my point? Why are we disagreeing here?

Quote: Quote: But when there is already capital available (i.e. if there is a sharp recession in an industiral ecconomy) then there will be alot of cheap capital for sale. Thus, if an extrodinarily sharp recession started, prices would go up, labor costs would go down, and capital would be cheap. A better situation to get rich has not occured since the great depression--and that chance was destroyed by government intervention (which, BTW, is exactly what this paper adressed). If the government hadn't stepped in, investors would have bought capital to produce goods, would have hired workers at extremly low wages, and would have produced at high prices. Other investors would enter the field, each trying to get rich, each hiring more workers, and each competing for a larger share of the market. This is the basic law of supply and demand in action, if you do not understand where I am going with this, you need to read up.

I already agree restricting the money supply was bad policy during the recession, I don't know if we clarified whether that was because of Govt decisions or the gold standard.
huh? I never said a word about the money supply... you should read it again.

Quote: Quote: Quote: Quote:
My point is that the relative importance of savings and investment in this country has not been sharp because of the availability of capital from foreign investors. The availability of capital ultimately affects the cost of capital, which is a key to long term investment and growth. The cost of capital has been relatively low in recent years. Inavailability of capital has generally not been a problem.
ok... and what is your point?

Quote: Because the cost of capital was already low and there has been sufficient capital for investment, there is nor reason to expect the recent tax cuts to provide marginally greater long term growth.
Two points
1. it depends on what we mean by "long term"
2. even if you are right, what about the other two variables? You have yet to account for them

(not that you have even come close to accounting for the first. If investment is indeed coming from foreign countries, then they need to produce as well in order to invest anything. There is no such thing as a free lunch.)

So what does that have to do with US tax policy and whether the tax cuts are doing anything more than contributing to this country being trillions more in debt.
It is the spending that is forcing the country into debt. The tax cuts along with the spending are a result of a both immoral and irresponsible administration of the government. If you took away the tax cuts it would be more immoral (i.e. you would be stealing more) and less irresponsible. I'm not sure which is better, but I would like to have it be both moral and responsible, wouldn't you?

Oh, and the point is that we can't rely on foreign investment when determining what actions the government should take.

[Gaea]

The cost of WWI and its post war reparations, combined with a collapse of the gold standard and disagreement over trade and tariffs between the UK and US may have helped cause the Great Depression.


Quote: "In 1925 Winston Churchill, then Chancellor of the Exchequer, seen as a stepping-stone to Number 10 Downing, attempted to return Great Britain to the gold standard with a series of steps, which would gradually have restored convertibility. However, it was also a goal to reverse the price increases, which required a contraction of the money supply. The resulting economic downturn both chased Churchill from the fast track to power, and created a government crisis.

This was the leading edge of the global down turn now known as the Great Depression, and with it came a seeming bind for monetary policy and economic theory. On the one hand it seemed that suspension of the gold system would lead to paper money and either high inflation or hyper-inflation, and on the other hand, the mechanisms for maintaining the gold standard - government austerity, higher taxes, monetary contraction and higher interest rates, led directly to severe economic collapse, unsustainably high unemployment, and agitation for communist or other radical forms of government.....


The London conference

In 1933, during the Great Depression, the London conference marked the death of the international gold standard as it had developed to that point in time. While the United Kingdom and the United States desired an eventual return to the Gold Standard, with President Franklin D. Roosevelt saying that a return to international stability “must be based on silver instead of gold” — neither was willing to do so immediately. France and Italy both sent delegations insisting on an immediate return to a fully convertible international gold standard. A proposal was floated to stabilize exchange rates between France, the United Kingdom and the United States based on a system of drawing rights, but this too collapsed.

The central point at issue was what value the gold standard should take. Cordell Hull, the US Secretary of State, was instructed to require that reflation of prices occur before returning to the Gold Standard. There was also deep suspicion that the United Kingdom would use favorable trading arrangements in the Commonwealth to avoid fiscal discipline. Since the collapse of the Gold Standard was attributed, at the time, to the U.S. and the UK trying to maintain an artificially low peg to gold, agreement became impossible. Another fundamental disagreement was the role of tariffs in the collapse of the gold standard, with the liberal government of the United States taking the position that the actions of the previous American Administration had exacerbated the crisis by raising tariff barriers......

In the present the general agreement of monetary policy research is that there is a strong correlation between leaving the gold standard and economic recovery, as part of the monetary theory of the Great Depression. This theory is held by both liberal and conservative economists, but is vehemently disputed by most supporters of a renewed gold standard, who argue the reverse: that the failure to commit to gold was the cause of the Great Depression.....

http://en.wikipedia.org/wiki/Gold_standard#Gold_standard_from_peak_to_crisis_.281901.E2.80.931932.29

[Atlas Bergeron]

Moot wrote: The cost of WWI and its post war reparations, combined with a collapse of the gold standard and disagreement over trade and tariffs between the UK and US may have helped cause the Great Depression.


Quote: "In 1925 Winston Churchill, then Chancellor of the Exchequer, seen as a stepping-stone to Number 10 Downing, attempted to return Great Britain to the gold standard with a series of steps, which would gradually have restored convertibility. However, it was also a goal to reverse the price increases, which required a contraction of the money supply. The resulting economic downturn both chased Churchill from the fast track to power, and created a government crisis.

This was the leading edge of the global down turn now known as the Great Depression, and with it came a seeming bind for monetary policy and economic theory. On the one hand it seemed that suspension of the gold system would lead to paper money and either high inflation or hyper-inflation, and on the other hand, the mechanisms for maintaining the gold standard - government austerity, higher taxes, monetary contraction and higher interest rates, led directly to severe economic collapse, unsustainably high unemployment, and agitation for communist or other radical forms of government.....


The London conference

In 1933, during the Great Depression, the London conference marked the death of the international gold standard as it had developed to that point in time. While the United Kingdom and the United States desired an eventual return to the Gold Standard, with President Franklin D. Roosevelt saying that a return to international stability “must be based on silver instead of gold” — neither was willing to do so immediately. France and Italy both sent delegations insisting on an immediate return to a fully convertible international gold standard. A proposal was floated to stabilize exchange rates between France, the United Kingdom and the United States based on a system of drawing rights, but this too collapsed.

The central point at issue was what value the gold standard should take. Cordell Hull, the US Secretary of State, was instructed to require that reflation of prices occur before returning to the Gold Standard. There was also deep suspicion that the United Kingdom would use favorable trading arrangements in the Commonwealth to avoid fiscal discipline. Since the collapse of the Gold Standard was attributed, at the time, to the U.S. and the UK trying to maintain an artificially low peg to gold, agreement became impossible. Another fundamental disagreement was the role of tariffs in the collapse of the gold standard, with the liberal government of the United States taking the position that the actions of the previous American Administration had exacerbated the crisis by raising tariff barriers......

In the present the general agreement of monetary policy research is that there is a strong correlation between leaving the gold standard and economic recovery, as part of the monetary theory of the Great Depression. This theory is held by both liberal and conservative economists, but is vehemently disputed by most supporters of a renewed gold standard, who argue the reverse: that the failure to commit to gold was the cause of the Great Depression.....

http://en.wikipedia.org/wiki/Gold_standard#Gold_standard_from_peak_to_crisis_.281901.E2.80.931932.29

I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.

[Gaea]

Atlas Bergeron wrote: Moot wrote: The cost of WWI and its post war reparations, combined with a collapse of the gold standard and disagreement over trade and tariffs between the UK and US may have helped cause the Great Depression.


Quote: "In 1925 Winston Churchill, then Chancellor of the Exchequer, seen as a stepping-stone to Number 10 Downing, attempted to return Great Britain to the gold standard with a series of steps, which would gradually have restored convertibility. However, it was also a goal to reverse the price increases, which required a contraction of the money supply. The resulting economic downturn both chased Churchill from the fast track to power, and created a government crisis.

This was the leading edge of the global down turn now known as the Great Depression, and with it came a seeming bind for monetary policy and economic theory. On the one hand it seemed that suspension of the gold system would lead to paper money and either high inflation or hyper-inflation, and on the other hand, the mechanisms for maintaining the gold standard - government austerity, higher taxes, monetary contraction and higher interest rates, led directly to severe economic collapse, unsustainably high unemployment, and agitation for communist or other radical forms of government.....


The London conference

In 1933, during the Great Depression, the London conference marked the death of the international gold standard as it had developed to that point in time. While the United Kingdom and the United States desired an eventual return to the Gold Standard, with President Franklin D. Roosevelt saying that a return to international stability “must be based on silver instead of gold” — neither was willing to do so immediately. France and Italy both sent delegations insisting on an immediate return to a fully convertible international gold standard. A proposal was floated to stabilize exchange rates between France, the United Kingdom and the United States based on a system of drawing rights, but this too collapsed.

The central point at issue was what value the gold standard should take. Cordell Hull, the US Secretary of State, was instructed to require that reflation of prices occur before returning to the Gold Standard. There was also deep suspicion that the United Kingdom would use favorable trading arrangements in the Commonwealth to avoid fiscal discipline. Since the collapse of the Gold Standard was attributed, at the time, to the U.S. and the UK trying to maintain an artificially low peg to gold, agreement became impossible. Another fundamental disagreement was the role of tariffs in the collapse of the gold standard, with the liberal government of the United States taking the position that the actions of the previous American Administration had exacerbated the crisis by raising tariff barriers......

In the present the general agreement of monetary policy research is that there is a strong correlation between leaving the gold standard and economic recovery, as part of the monetary theory of the Great Depression. This theory is held by both liberal and conservative economists, but is vehemently disputed by most supporters of a renewed gold standard, who argue the reverse: that the failure to commit to gold was the cause of the Great Depression.....

http://en.wikipedia.org/wiki/Gold_standard#Gold_standard_from_peak_to_crisis_.281901.E2.80.931932.29

I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.

I'm not an expert by any means, but the way I understand it....is that prior to WW1 most countries would go off the gold standard when they went war. They would used fiat money, which back then was like borrowing to help pay for the war machines and effort. When the war was over they usually went back to the gold standard and began to pay off the debt incurred from the war. But this didn't quite happen after WW1. Churchill tried to bring back the gold standard but there was a severe monetary contraction because he also tried to curb inflation at the same time and it threw the country into severe economic downturn. So before Churchills plan could play itself out they ousted him. Both the US and UK were undervaluing gold and pegging their paper dollar to it. Not sure about the UK but the US also raised taxes and increased interest rates which led to unsustainable high unemployment. I think thats the jest of it.

But I also remember something about the Hunt Brothers(?) trying to corner the market on silver which caused the 1929 stock market to collapse. Also, I'm not sure but I don't think the US had central bank during that time that could bail out collapsing banks either .....not sure about that though. We have more safe guards today, than we did back then, but still. Without something secure to base our money on, times could still get rough.

Anyway, I'll start a thread about the gold standard because I want to learn more about it. Alan Greenspan apparently put us on the gold standard when he first took over the Fed and then suddenly stopped pegging the dollar to gold in 1996. Which I think may have been the cause of the reccession we recently had. I am curious to know if we are going to ever going to go back on the gold standard. I think we should too. But, it doesn't look like we are judging by the Feds printing out money like its going out of style. This is undervaluing our dollar which might be good if its used to pay off large debt. But congressional spending would have to get under control and so far it hasn't. Going back to the gold standard would help government be more fiscally responsible and less chance to screw up the economy, thats for sure.

[RueTheDay]

Moot wrote: [Alan Greenspan apparently put us on the gold standard when he first took over the Fed and then suddenly stopped pegging the dollar to gold in 1996.

Ummm, no, that is false. Nixon took the US off of the Gold Standard in 1971 and we have never returned to it since.

[psholtz]

RueTheDay wrote: Moot wrote: [Alan Greenspan apparently put us on the gold standard when he first took over the Fed and then suddenly stopped pegging the dollar to gold in 1996.

Ummm, no, that is false. Nixon took the US off of the Gold Standard in 1971 and we have never returned to it since.
Yes, Nixon took the US off the international gold standard of Bretton Woods on August 15, 1971, although that "gold standard" was largely only for foreign central banks.. I'm not sure that individual, private American citizens have had access to convertible gold standard since 1933..

[RueTheDay]

psholtz wrote: RueTheDay wrote: Moot wrote: [Alan Greenspan apparently put us on the gold standard when he first took over the Fed and then suddenly stopped pegging the dollar to gold in 1996.

Ummm, no, that is false. Nixon took the US off of the Gold Standard in 1971 and we have never returned to it since.
Yes, Nixon took the US off the international gold standard of Bretton Woods on August 15, 1971, although that "gold standard" was largely only for foreign central banks.. I'm not sure that individual, private American citizens have had access to convertible gold standard since 1933..

That's correct. The gold standard was pretty much hobbled from 1933 on. Even before that, the US would periodically go on and off.

[Free Thinkr]

Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?

[Atlas Bergeron]

Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?

The US government. What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)

[Free Thinkr]

Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?
The US government.
The US government itself is not force. It cannot "force" the dollar to have value (though, many governments have tried!).

Quote: What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)
Well, that's something wholly different. It's not forcing the dollar to have value, but preventing other currencies from being used. Which makes sense, btw. The natural evolution of currency is toward a currency with no intrinsic value; except it and move on.

[Atlas Bergeron]

Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?
The US government.
The US government itself is not force. It cannot "force" the dollar to have value (though, many governments have tried!).

Quote: What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)
Well, that's something wholly different. It's not forcing the dollar to have value, but preventing other currencies from being used. Which makes sense, btw. The natural evolution of currency is toward a currency with no intrinsic value; except it and move on.

If that is the natural evolution, then why would the government need to get involved in it?

[Free Thinkr]

Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?
The US government.
The US government itself is not force. It cannot "force" the dollar to have value (though, many governments have tried!).

Quote: What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)
Well, that's something wholly different. It's not forcing the dollar to have value, but preventing other currencies from being used. Which makes sense, btw. The natural evolution of currency is toward a currency with no intrinsic value; except it and move on.

If that is the natural evolution, then why would the government need to get involved in it?
They're sorta the logical choice, don't you think? Who else should mint money?

[LeopardPM]

Free Thinkr wrote: Atlas Bergeron wrote:
If that is the natural evolution, then why would the government need to get involved in it?
They're sorta the logical choice, don't you think? Who else should mint money?
anyone - actually, we each 'mint money' each day when we productively labor - our efforts generate wealth.

[Free Thinkr]

LeopardPM wrote: Free Thinkr wrote: Atlas Bergeron wrote:
If that is the natural evolution, then why would the government need to get involved in it?
They're sorta the logical choice, don't you think? Who else should mint money?
anyone -
Yeah; I suspect that wouldn't work very well.

Quote: actually, we each 'mint money' each day when we productively labor - our efforts generate wealth.
Money != wealth.

[Iriemon]

Atlas Bergeron wrote: Iriemon wrote: Atlas Bergeron wrote: Iriemon wrote:
Apparently they are not right, over the long term GDP growth has been no better with lower taxes.
do you mean over the period of five or six years?

50-60 years.
has there ever been a period of fifth to sixty years with "lower taxes"?(other than the industrial revolution... which experienced gigantic economic growth.)

Well, yeah, between 1950-1980 the top tax rate was 91% then 70%.

From 1986-2006, the top tax rate fluctuated between 28% and 39%.

Yet growth during the latter period was no better than the former.

Quote: Quote: five or six years is hardly a "long run," especially when only one of the three conditions is met. Your evidence is null.

Quote: I posted the average data from the 50s to today. How much longer term do you need?
your data went back and forth between higher taxes and lower taxes. For all we know, the lower taxes could have had a delayed effect which made the high taxes looked good, or the high taxes could have had a delayed effect which made the low taxes look bad. Buisness investment does take time, and just becuase the government changes its mind every four years doesn't mean that investors can or will.

One then would have expected to see growth stronger in the time from from 1981 (or 1986) to the present, when top rates were marginally lower (about 1/2) than in the 50s, 60s and 70s.


Quote: Two points
1. it depends on what we mean by "long term"
2. even if you are right, what about the other two variables? You have yet to account for them

What about the other variables? That is my point. It is the "other variables" that have effected economic growth farm more than tax policy over the past 5 decades.


Quote: Quote: So what does that have to do with US tax policy and whether the tax cuts are doing anything more than contributing to this country being trillions more in debt.
It is the spending that is forcing the country into debt. The tax cuts along with the spending are a result of a both immoral and irresponsible administration of the government. If you took away the tax cuts it would be more immoral (i.e. you would be stealing more) and less irresponsible. I'm not sure which is better, but I would like to have it be both moral and responsible, wouldn't you?

I'm sure you are smart enough to know that deficits are function of both spending and revenues, not just one or the other.

In posting this stuff, I do not mean to imply that I think think spending should not be cut. However, if spending is not cut it is wrong and more harmful, IMO, to borrow money to make up the difference.

The interest expense on the debt was $405 billion last year, a 15% increase over FY05. Even accounting that a big chunk of that is interest on intragovernment debt, that is a huge figure to be losing every single year thanks to the accumulated debt.

Quote: Oh, and the point is that we can't rely on foreign investment when determining what actions the government should take.

I think we both agree that the deficit financing this administration is doing puts us at risk that way.

[Iriemon]

Quote:
I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.

Governments went off a commodity standard for a good reason, it tied money supply to the availability of a commodity.

We agreed that a restrictive money supply between 1929 and 1933 was a force that was a factor in the great depression. A money supply tied to a commody, as the dollar was during that time period, is restricted to the supply of the commodity. In times of depressed economic activity and deflation like the great depression, Govt needs and should have the ability to expand the money supply to ease credit and stimulate economic activity.

[Atlas Bergeron]

Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?
The US government.
The US government itself is not force. It cannot "force" the dollar to have value (though, many governments have tried!).

Quote: What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)
Well, that's something wholly different. It's not forcing the dollar to have value, but preventing other currencies from being used. Which makes sense, btw. The natural evolution of currency is toward a currency with no intrinsic value; except it and move on.

If that is the natural evolution, then why would the government need to get involved in it?
They're sorta the logical choice, don't you think? Who else should mint money?

Couldn't a company buy gold and then mint coins? Why shouldn't they be able to? Why does the government have to be involved in it?

[Iriemon]

Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: Free Thinkr wrote: Atlas Bergeron wrote: I also agree that it was a bad idea to go off the gold standard. This changed the monetary unit from one with actual market value to one which only has value as guaranteed by force.
Guaranteed by force? What force is that?
The US government.
The US government itself is not force. It cannot "force" the dollar to have value (though, many governments have tried!).

Quote: What is backing the dollar except consumer trust and the force of the government (i.e. the force is in preventing any other form of currency from being developed.)
Well, that's something wholly different. It's not forcing the dollar to have value, but preventing other currencies from being used. Which makes sense, btw. The natural evolution of currency is toward a currency with no intrinsic value; except it and move on.

If that is the natural evolution, then why would the government need to get involved in it?
They're sorta the logical choice, don't you think? Who else should mint money?

Couldn't a company buy gold and then mint coins? Why shouldn't they be able to? Why does the government have to be involved in it?

Are you really suggesting the economy would be better off if exchange was based on peice of 8? To buy a coke you'd have to drop in a piece of gold the size of a grain of sand. And then you'd need to have systems to ensure the grain was pure. We'd all need to carry aroud tweezers and jewel's magnifying eye piece to conduct day to day business.