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Liberal Economics 101.

Discussion in 'Economics, Business, and Taxes' started by Sgt Staples, Feb 23, 2012.

  1. Sgt Staples

    Sgt Staples Mayor

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    When Liberal economic policies fail, as they always do, Liberals say that it is simply because government didn't spend enough or tax enough.

    Evidently, Liberals think that only government spending creates jobs.

    But let's look at economic mathematical fact:

    When government increases spending on projects, such as building roads and bridges, it has to take that money from some other sector of the economy by taxation.

    In other words government tries to increase productivity in one sector, by choosing where money is spent, while at the same time reducing productivity in the sector where that money was taken from (the Private Sector).

    This results in no net job creation, as for every job government creates it destroys another job in another sector of the economy.

    Actually it's worse than that.

    If we look at Obama's stimulus package and divide the amount spent by even the inflated number of jobs that Obama says it created, we will find that the government spent about $250,000 per job created.

    Since the average job created by the private sector costs the private sector about $60,000, we could have created over 4 times by as many jobs by adding 800 billion to the private sector through tax relief instead of giving it to government to decide where it would be spent, unemployment would be around 5.5% instead of 9%, GDP would be about 5% instead of the meager 1.7% it was all of last year.

    That also means that the government would have received 4 times as much in tax revenue from those jobs, meaning the tax cuts would have eventually paid for themselves, rather than adding 800 billion to the debt.

    That's why taking more from the private sector and giving it to government reduces revenue and tax cuts, which leave more money in the private sector increase revenue.

    Tax revenue in Britain has dropped greatly after their recent tax increase. It always does.

    The basic math and economic history prove it beyond all doubt or argument.

    Every time the Capital Gains tax was reduced, revenue received from the capital gains tax INCREASED due to more money being available for investment. The Revenues received from that increased investment exceeded the revenues lost by the lower rate.

    If Obama gets his way and Cap gains rates are tripled, revenue received from cap gains taxes will drastically be reduced as investment will be drastically reduced.

    And since our economy is still struggling to recover from the punishment Obama is inflicting on it, we will slide into immediate severe recession or even depression.

    The math and historical fact prove it.

    Something you Obama Zombies might want to consider.
     
  2. TwoWitnesses

    TwoWitnesses Mayor

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    I' would be interested in reading the link that corroborates that claim. It may be correct, I would really like to know.
    Wrong. Bush I, Clinton and Reagan raised taxes and during a 4-year stretch, the Government had a surplus, and taxes were higher than they are now.
     
  3. Sgt Staples

    Sgt Staples Mayor

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    .

    Clinton cut the Capital Gains Tax, revenues went up, And Reagan reduced taxes much more than he increased them, from a top rate of 70% down to 28% and revenues doubled. George Herbert Walker Bush tax increases through us into recession and revenue declined,

    The deficits under virtually every administration were caused by too much spending. The Democrats under Reagan spend a $1.40 for every increased dollar that came in through the tax cuts.
     
  4. TwoWitnesses

    TwoWitnesses Mayor

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    I was asking you about the United Kingdom...
     
  5. Sgt Staples

    Sgt Staples Mayor

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  6. TwoWitnesses

    TwoWitnesses Mayor

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    The amount of income tax paid fell sharply last month in the first formal indication that the new 50p higher rate is not raising the expected amount of revenue.

    Sharply = 4.9%. First month of the new tax, so the trend hasn't been shown yet.
     
  7. Woolleybugger

    Woolleybugger Mayor

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    Using this logic, all debt incurred by anyone, any corporation or anything does not increase demand. You are advocating a world with no credit. As usual, your economic chops lag behind your ideology.
     
  8. Lukey

    Lukey Senator

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    Um. no. Private debt is paid off with future EARNINGS while public debt can only be paid off with future TAXES (including inflation). The Federal government doesn't "earn" anything...
     
  9. Woolleybugger

    Woolleybugger Mayor

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    Future earnings of individuals include future new tax revenues from the increased earnings...You do understand the relationship between tax income to the government and gnp growth?
     
  10. Lukey

    Lukey Senator

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    The government has an abysmal record of investment efficacy. The idea that government borrowing and spending grows the economy (in a self sustaining manner) does not comport with the facts.
     
  11. middleview

    middleview President Supporting Member

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    The Reagan administration proved deficit spending doesn't matter....at least that is what Dick Cheney believed to be true as Reagan tripled the national debt. Reagan raised taxes, Bush 41 raised taxes, Clinton raised taxes....the result was that by the end of Clinton's term we had a surplus. "W" said that the suplus "is your money, you know better how to spend it"....do you remember that? He doubled the national debt. Obama has a lot of tax cuts between 2009 and now. Do you think those tax cuts were wrong? The extensions to unemployment benefits and money to the states to maintain medicaid coverage for all those people hurt by the Bush recession....spending to keep GM and Chrysler alive has been shown to have saved a million jobs. Was that wrong?

    Your numbers for jobs saved or created by the stimulus is silly. The $787b was 1/3rd tax cuts. It was nearly 25% for extensions to unemployment and aid to the states. The remainder was for those shovel ready jobs.....and if you use three years and not one year as the cost per job you get a much lower number than what you throw out....

    But then you guys have never been known for accuracy in your "facts".....
     
  12. Woolleybugger

    Woolleybugger Mayor

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    What in the world are you talking about? The US government has been in debt since its founding. We have had deficits every single year for decades, generations really. This kind of mindless parrotiing of ideology masquerading as some truth telling is so childish.
     
  13. Bruce

    Bruce Council Member

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    You seem to keep ignoring the fact that as Reagan cut taxes (mainly for the super rich carpetbaggers) He had to raise the federal debt ceiling numerous times in order to offset the losses in revenue that he was so freely handing out to the 1%. I have no problem with his military defense budget except his math skills. You need tax dollars to wage war on the russians and other's. Nothing is free under our system. As you so proudly keep informing us. If your gonna credit card the debt then you might at least inform those who will be expected to pay it off. Since the 1% and the better than well to do seem to have a lapse of memory as to who benefited the most from massive spending and the protection of their wealth. Since about 3-5% of the people here own 80-90% of the wealth it's hard to imagine that the other 95% is to pay off the debt when they have very little wealth if any to protect. Problem with our system is we're being duped and attacked by the 5% that suck us dry.
     
  14. Bruce

    Bruce Council Member

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    Still waiting for those job creators to come forward. Should we send out a search party? Maybe their lost in the Caymens
     
  15. Lukey

    Lukey Senator

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    They are sitting in more liquid assets, waiting to see how much of their money Obama is going to strip from them.
     
  16. OldGaffer

    OldGaffer Governor

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    Bullshit. A mindless Winger talking point.
     
  17. Lukey

    Lukey Senator

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    Yes, unlike your scathing rebuttal there...
     
  18. middleview

    middleview President Supporting Member

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    You wrote:

    They are sitting in more liquid assets, waiting to see how much of their money Obama is going to strip from them

    Given the depth of that analysis, what more was required than the rebuttal you got?
     
  19. Woolleybugger

    Woolleybugger Mayor

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    welcome to the economics class where a couple students argue with the professor because they have taken the class 10 times, failed each time insisting that the professor is using the wrong textbook...
     
  20. Lukey

    Lukey Senator

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    [​IMG]
     

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