Arthur Laffer predicts double dip recession in 2011

[imagep]

emphasis added by bubba

sorry, but banks were NOT pressured to make high risk loans

Maybe not, but that is something that I have seen people on TV saying. I have seen many right wing commentators discuss how we have laws (blaiming Barney Franks and other Democrats for the laws) that required that banks make a certain percent of loans to high risk people. It is entirely possible that these right wing commentators have distorted the truth in order to prove that big government is the problem - wouldn't be the first time.

By the way, when I appear to be bashing conservatives, I am only bashing the lies that they tell and their unyielding partisonship. Personally, I lean strongly to the right on many issues.

 

[cpwill]

emphasis added by bubba

sorry, but banks were NOT pressured to make high risk loans

um, yes. objectively, they were.

 

[I'm Supposn]

um, yes. objectively, they were.

C. P. Will, a loan (the bank would have otherwise have denied), was not granted due to a federal mandate. I suppose you'll explain what the federal government did to twist the bank’s arms and thus pressure them to make high risk loans? I suppose your explanation will be satisfactorily objective?

How is this topic related to federal tax policy? Why are we discussing bank regulation within this thread?

Respectfully, Supposn

 

[Lord Tammerlain]

Also, to the dismay of "Reagan Conservatives", Laffer also got the Laffer Curve wrong. It makes me chuckle when I hear some conservatives say how "if you cut tax rates then tax revenues will increase". They say that crap over and over and say that it was proven in the '80's. What was proven in the '80's was that when adjusted for inflation tax revenues decreased significantly after the tax cuts, and it took 6 years after the tax cut before tax revenues reached the pre-tax cut amount. They then will say that the tax cuts created 6 years of growth, but the fact is that the economy was already recovering from a terrible recession BEFORE the tax cuts, and 6-8 years of economic growth between recessions is normal.

Here's the kicker, these "Reagan Conservitives" credit tax cuts on the rich for the economic growth and totally ignore the possibility that maybe the tax cuts on the middle class could have had something to do with it.

What most Reagan conservatives ignore is the stimulative effects of the Reagan era deficits on the economy. With the deficits as % of GDP being as large in general as GDP growth rates, the deficits would have been a primary driver of most of the economic growth during the Reagan years.

 

[Kushinator]

What most Reagan conservatives ignore is the stimulative effects of the Reagan era deficits on the economy. With the deficits as % of GDP being as large in general as GDP growth rates, the deficits would have been a primary driver of most of the economic growth during the Reagan years.

AKA: military Keynesianism!

 

[obvious Child]

AKA: military Keynesianism!

I enjoyed bringing that up aganist Gipper who was attacking Keynesianism and then watching him run away. Conservative just pretended I never argued that.

Keynesianism is wrong......except when Reagan did it!

Trickle down does work...when it's the corporations spending huge amounts of money to feed a massive military buildup.

 

[oldreliable67]

Old Reliable 67, reconsidering my words, I regret writing “this speech’s” rather than “his” contentions.

My messages and conclusions should not be perceived (as your message implied) to be supportive of supply side economics.

My apologies. Didn't mean to imply anything at all. Just wanted to draw attention to a rather good (I thought) rebuttal of Laffer's article.

 

[oldreliable67]

Keynes often gets a bit of a bum wrap, IMO. Very seldom does one see a full treatment of Keynes' stimulus tenets: that fiscal restraint must inevitably follow fiscal stimulus. Typically the media and even economists attention is focused only the stimulus part of the cycle, giving short shrift, if any attention at all, to subsequent policies. In effect, attention is focused on only half of the Keynesian prescription. The historical experience is pretty clear that policymakers have historically ignored the essential second half of Keynes prescription.

Whether or not one agrees with Keynes, it is disingenuous to proclaim it a failure (or a success) based on examination of half a loaf.

 

[imagep]

What most Reagan conservatives ignore is the stimulative effects of the Reagan era deficits on the economy. With the deficits as % of GDP being as large in general as GDP growth rates, the deficits would have been a primary driver of most of the economic growth during the Reagan years.

Makes sense to me, that is something that I never gave any consideration to.

 

[imagep]

Very true.

You guys are so much more fair and un-partision than on my regular forum!

 

[Lord Tammerlain]

Very true.

You guys are so much more fair and un-partision than on my regular forum!

If Conservative is still around he will argue against the Keynsian policies of the Reagan era, so do a few others. Conservative due to strong support for Reagan, others due to a missunderstanding of what government economic stimulus really is (ie spending that otherwise would not have taken place)

And Oldreliable is also correct in that most governments fail to follow through on Keynsian policies of running surplus's during good economic times, which would of course subtract from economic activity during the boom times.

 

[obvious Child]

If Conservative is still around he will argue against the Keynsian policies of the Reagan era, so do a few others.

Come again? Conservative will pretend that Reagan didn't practice Keynsian policies and that only tax cuts, not massive government spending was the cause of the boom. I, and other brought up many examples of spending by Reagan during the era that he completely ignored. That guy is a certified hack.

 

[Lord Tammerlain]

Come again? Conservative will pretend that Reagan didn't practice Keynsian policies and that only tax cuts, not massive government spending was the cause of the boom. I, and other brought up many examples of spending by Reagan during the era that he completely ignored. That guy is a certified hack.

Sorry,

That is what I meant, I didnt write that post out very clearly

Yes Conservative would say Reagan did not practice keynsian economics

 

[obvious Child]

Yes Conservative would say Reagan did not practice keynsian economics

That makes more sense.

What I don't understand is how people like Conservative and Adpst can say that government cannot create wealth and jobs and yet support big defense spending. The defense contractors are where they are now because of government spending. In many ways, the military is a quasi-socialist economic oriented program. We spend trillions of dollars over the past decades which have provided numerous applied material advances which have driven the consumer economy creating new companies and thousands of jobs. The notion that government cannot create wealth and jobs is effectively saying that the defense contractors did not grow on government projects. That's utterly insane.

What I noticed here is that those who actually understand history and economics don't say those kind of crazy @ss statements.

NASA alone has spawed countless inventions and even new industries. No jobs you say?

 

[Ahlevah]

What I don't understand is how people like Conservative and Adpst can say that government cannot create wealth and jobs and yet support big defense spending.

The military is not principally a jobs program. It's a necessary evil specifically authorized in the Constitution to defend the country. Yeah, we have defense contractors and some of them make a lot of money, but I would gladly disband our military and redeploy those resources to making things like wind turbines if peace would permanently break out in the world.

 

[obvious Child]

The military is not principally a jobs program.

I never said it was. I was merely pointing out that via military spending was get quite a large amount of civilian related jobs. Contrary to the asinine beliefs of Conservative and Apdst who have repetively argued that government cannot create wealth or jobs.

Lockheed Martin stands as proof they are wrong.

 

[PeteEU]

I never said it was. I was merely pointing out that via military spending was get quite a large amount of civilian related jobs. Contrary to the asinine beliefs of Conservative and Apdst who have repetively argued that government cannot create wealth or jobs.

Lockheed Martin stands as proof they are wrong.

So right.. hell Boeing and tons of arms companies are basically government jobs since their main source of income is the US military. Also the 1.2 million in the US military are all government jobs

 

[Ahlevah]

I never said it was.

OK, this is one conservative who will grant your point that government can create jobs. But, just so you understand, I support big defense spending because I want the country defended. I suppose we could have the government hire everyone who doesn't have a job, and then we could make the same claim that the Soviet Union did: Full Employment. My point is government is not the most efficient mechanism for allocating scarce resources. Look, for example, at the Department of Education. What does this department really do that adds value to our economy? Judging by the state of public education in this country, can anyone say that we're getting our money's worth?

 

[I'm Supposn]

............ You guys are so much more fair and un-partision than on my regular forum!

Image P, what's your regular forum? Maybe we'll join you.

Respectfully, Supposn

 

[Ahlevah]

OK, this is one conservative who will grant your point that government can create jobs. But, just so you understand, I support big defense spending because I want the country defended. I suppose we could have the government hire everyone who doesn't have a job, and then we could make the same claim that the Soviet Union did: Full Employment. My point is government is not the most efficient mechanism for allocating scarce resources. Look, for example, at the Department of Education. What does this department really do that adds value to our economy? Judging by the state of public education in this country, can anyone say that we're getting our money's worth?

In a similar vain, I hear people all the time griping about the cost of our healthcare system. As a veteran, I'm eligible for free care from the VA. But I chose instead to buy into my group healthcare plan at work. Why? Because the service at the VA is spotty at best, and I don't trust that agency to give me the best care available. A coworker of my mine said no thanks to group coverage. He made an appointment with the VA, or, rather, the VA made an appointment with him. Because he got his appointment card on short notice, he could not apply for a paid day off. Instead, he chose to call out of work, but when he showed up for his appointment the staff told him the doctor wasn't in. No explanation as to where the doctor was, just that he wasn't there to see anybody that day. Then he tried the department that issues prescription drugs, and they were out for the day as well. When my coworker asked a staff member if anyone was working he got a shrug and a "Probably not." I'm still waiting to find out how his second appointment went.

 

[imagep]

Image P, what's your regular forum? Maybe we'll join you.

Respectfully, Supposn

For years I have participated in several trade industry forums - a couple of them are mostly screen printing oriented and one is for sign makers. Although the intent of those forums is to support those industries, political or economic topics freqently pop up. The sign makers forum (signs101.com) had so many problems with people "getting political" that they actually started a "no holds bared" section which you have to sign up for seperately - and pretty much any topic is welcome. We have a few left wingers there, a few middle of the road types, and a heck of a lot of far righties.

I generally get attacked by both the left and the right, with the lefties accusing me of being on the far right, and the people who really are on the far right calling me a "closet communist" and both sides accusing me of "flip flopping" because some of my ideas tend to align more with the left and some tend to align more with the right. I figure that when both extremes hate me - that I must be just about in the correct spot! But it's kind of frustrating when anything that I suggest will be shot down - like if I said that Pantone Color 485 is red (and it is), someone would feel compelled to accuse me of being crazy because Pantone 485 is "stop sign red".

So far most of the posters on this site have been much more tollerant of some of my unusual ideas than on my industry specific forums. Of course there is probably a big educational level difference between a site intended for sign makers and a site created just to facilitate intellectional debate - not saying that those sign makers are stupid, some of them are quite brilliant, but they frequently just repeat the platform retoric of which ever political party that they happen to identify with. Origional thoughts are far and few between there. Truthfully, during my discussions on the trade sites, I have rarely needed to look anything up and rarely have I heard a term that I was unfamiliar with. On this forum however, I have found myself constantly looking up stuff just so that I can figure out what you guys are talking about. A lot of what you guys are discussing is a little above my head.

 

[cpwill]

I never said it was. I was merely pointing out that via military spending was get quite a large amount of civilian related jobs. Contrary to the asinine beliefs of Conservative and Apdst who have repetively argued that government cannot create wealth or jobs.

Lockheed Martin stands as proof they are wrong.

you are mistaking the creation of particular jobs for the creation of net jobs. If I rip down 3 houses and use the materials to build 1 house, have I really "created houses"?

 

[imagep]

Originally Posted by obvious Child
I never said it was. I was merely pointing out that via military spending was get quite a large amount of civilian related jobs. Contrary to the asinine beliefs of Conservative and Apdst who have repetively argued that government cannot create wealth or jobs.

Lockheed Martin stands as proof they are wrong.

I get what you are saying, but I have a slightly different take.

The government can definately create jobs, I agree. The government rarely creates wealth though. Lockheed Martin may have become a very sucessful company due to contracts with the government, but those contracts were paid for by the government taxing the population at a higher rate than it would have needed to if it had not made purchases from Lockheed Martin. So while the government may have created jobs by making those purchases, it only redistributed wealth from the population to Lockheed Martin - it didn't nessasarally create the wealth that Lockheed Martin was able to extract from those sales to the government. I'm not even suggesting that those government purchases were bad, I believe in a strong defense, but they just didn't create wealth.

There may be that rare exception such as when the government invests in infrasture and new jobs are then possible due to that infrastructure. The Hoover Damm may be an example of that. The electrictity and recreational opportunites provided by the damm may have resulted in a net job gain in the private sector that was not possible without the Hoover Damm. Of course in theory, the Hoover Damm could have also have been accomplished by the private sector - thats why we allow people too pool their money together and start corporations - to accomplish large business endevors that could not have been accomplished by individuals on their own. The interstate road system may actually be a better example, this is something that would likely to have been impossible for any private company to have achieved, and something that definately created jobs, and likely lead to the creation of wealth due to it facilitating trade between states.

I think that maybe we would all agree that government in itself is not bad, it's just bad government that is bad. Now if we could only come up with a forumla to create a government that is capable of making good business decisions free from any political influence. Hmm, cant think of any way to do that right off. Anyone have the solution? Maybe TERM LIMITS could be a starting point?

Just a note about a personal observation about how incompetent bad government can be: I live in a county with lots of really terrible roads. When the spendulous bill passed, I had really hoped that some of our roads would be improved. The day that the road crew arived at the road that my business is on I was thrilled. Last week, the road crew came back, and PAVED MY ROAD FOR THE SECOND TIME THIS YEAR! Meanwhile, I haven't seen any other road projects in my county what-so-ever. I guess it makes me somewhat special that they would pave my road twice in six months, but it would have been even better if they would have paved two different roads once instead of my road twice.

Sorry about the rant.

 

[obvious Child]

OK, this is one conservative who will grant your point that government can create jobs. But, just so you understand, I support big defense spending because I want the country defended. I suppose we could have the government hire everyone who doesn't have a job, and then we could make the same claim that the Soviet Union did: Full Employment. My point is government is not the most efficient mechanism for allocating scarce resources.

But neither is necessarily the market. Look at the millions of dollars wasted on stupid **** like Chia pets. What ideologues fail to recognize is that it is who is in charge. Intelligent consumers would drive a market that would be far more efficient then average government, but a market full of idiots would not utilize resources better then government lead by highly intelligent, highly practical people.

 

[obvious Child]

you are mistaking the creation of particular jobs for the creation of net jobs. If I rip down 3 houses and use the materials to build 1 house, have I really "created houses"?

Incorrect. Apdst has stated "government cannot create jobs." Furthermore, as the civilian application of military use technologies proves, the net gain on spending can be quite massive. If we take money that could have been used to hire 3 minimum wage jobs and instead fund research that provides breakthrough that spawn entire new industries, the net gain is obviously beneficial.