Myth: Tax cuts stimulate the economy; government spending does the opposite.

[FreeEcon]

True in one sense, but false in its implication. First off, when we had a 70% top tax bracket, that was after it was cut from 90% before. Second, Clinton reduced government spending, which is another key part. Often times, taxes are cut, but spending stays the same or even rises. That's the major problem. Sure, government could do something right with it, just as a broken clock is right twice a day. But it lacks the structure that would make it choose good policies and avoid bad ones

[guidedmarkets]

@l3GaliZEFREEdome38 "Whenever there are in any country uncultivated lands and unemployed poor, it is clear that the laws of property have been so far extended as to violate natural right." —Thomas Jefferson

[saagua1953]

Facts say exactly the opposite. From 1951 to 1963 the top tax rate in the US was 91% (on incomes over $400,000). The real inflation adjusted growth rate of the economy during those years was 3.34%. Shrub lowered the top tax rates drastically in 2001 and 2003. What was the real inflation adjusted growth rate of the US economy during those years: 1.60% or less than half the rate when top rates were very high.

[AtheisticLiberator]

This is a great video. It's a shame it hasn't had more views. On this idea that "government can only introduce money into the economy which it has taken from the economy," even if this were true, this is better than the alternative of rich people stowing away their money where it has little interaction with the economy. In a sense, government can play an important role by making sure money keeps circulating. It's a shame more people do not understand that.

[Mezey5]

You just made a big mistake saying FDR's social programs saved us from the Great Depression. It lasted almost a decade, how can you say it worked. Also, the jobs "created" by WWII didn't get us out. It was the trade that opened up between other countries. Unemployment went from single to double digits after the hawley-smoot tariff was passed.

[ryansatori28]

Great video!! Makes a lot of sense, Progressives and Libertarians need to come to gether because 30 years of Regan politics has given us 13 trillion in debt!!

[Beingism]

@ryansatori28 Thank you. We agree—it's easy to forget our commonalities sometimes.

[aaasssfffdddiii]

@Beingism You forget that capital accumulation and investment are vital for any economy to grow. More importantly, you forget that people must produce first to gain the purchasing power to consume. Again, consumption is the result of production. The goal of economic policy must be to improve incentives to produce more. This is why tax cuts do help the economy, and why economic research supports this assertion.

[guidedmarkets]

@aaasssfffdddiii We don't forget that. I think you're making some assumptions about our viewpoint. No one is denying that tax cuts can stimulate the economy, and no one is contending that government spending must do so. However, many kinds of government spending can and do stimulate the economy—there's nothing magical about private spending on, say, infrastructure that makes it any different from government spending on the same thing.

[aaasssfffdddiii]

@guidedmarkets Also, the link you put in the video did not provide any evidence that larger government helps GDP Growth, because it does not. As to your other comment, there is something magical about private spending. That is that it is allocated by consumer demand and not central planners. This is why markets are inherently more efficient. Resources are allocated through the price system. No central planner has enough information to make all economic decisions in a World Wide Modern Economy.

[guidedmarkets]

@aaasssfffdddiii I'm referring to nonpartisan evidence from the Center on Budget and Policy Priorities. Your point about markets being motivated by demand doesn't seem extremely relevant here; there are plenty of self-interested things to do with money that don't stimulate the economy all that well, like investing as opposed to spending. Likewise, as I've said, some government spending doesn't stimulate the economy, but much of it does—that's the point here. Both can work, neither always do.

[aaasssfffdddiii]

@guidedmarkets First, you say investing does not help the economy. This is blatantly false. You have to have investment in any economy. Without start-up capital (which requires savings and investment), how will any business start in the first place?

The Center on Budget and Policy Priorities does not provide any evidence at all, they simply explain theory and make some general statements. Likewise, they are obviously not non-partisan.

[guidedmarkets]

@aaasssfffdddiii I didn't say investing doesn't help the economy; that would be ridiculous. Please read my statements more carefully. What I implied was that spending (generating demand) stimulates the economy much better than investing money does, which is the subject of this video.

The CBPP references papers and data from objective sources. It's a nonprofit funded by private nonpartisan sources. You can say it's biased, but I don't know of any evidence to support that conclusion.

[aaasssfffdddiii]

@guidedmarkets The CBPP self-identifies as a Liberal Policy Instittute. Saying that they are not biased would be like me saying that the Heritage Foundation is not Biased. As I said earlier, a vast majority of economic research shows a negative correlation between government size and economic growth. This would run contrary to your assertion that government spending helps the economy. What we do know is that the private market is far better at creating wealth than government.

[guidedmarkets]

@aaasssfffdddiii Where are you getting your facts here? The CBPP identifies in no such way, as you can easily determine from their website.

Yes, you did say that earlier, but what is missing from your posts is any evidence at all disputing the actual assertion made in the video: that both government spending and tax cuts stimulate the economy. How good markets are at creating wealth, for example, is irrelevant to this conversation. Stop mischaracterizing my statements and address the point.

[aaasssfffdddiii]

@guidedmarkets The CBPP is most certainly a partisan institute. This is not an opinion, it is a fact. Please go read their articles and see whether they support progressive ideas or conservative ideas.

Government Spending hurts the economy. Again, a vast majority of economic research finds a strong negative correlation between government size and economic growth. Higher Taxes also hurt the economy by disincentivizing productive behavior. This is also supported by economic research.

[guidedmarkets]

@aaasssfffdddiii It's a credible organization that does real analysis based on data from objective sources on poverty without predefined conclusions. Dismiss it on ideological grounds if you wish.

The rest of your point continues to be irrelevant. I agree that taxes, if high enough, create disincentives. So? I have not advocated for "big government" (whatever that even means). I am saying that government spending can stimulate the economy, and sometimes does so more effectively than a tax cut.

[aaasssfffdddiii]

@guidedmarkets No, it is an organization that pushes for such policies as a larger welfare state and higher more progressive taxation.

Government Spending does not stimulate the economy. If it did, countries with larger governments, like France, should have faster economic growth than countries with small governments, like Hong Kong, Singapore, Chile, and America (pre-Obama).

Yet, the exact opposite is true. The free market countries are growing much faster than the big government ones.

[guidedmarkets]

@aaasssfffdddiii I've said all I need to say about the CBPP. The rest of your point continues to be immaterial to the video's point, which I will repeat is not that maximizing government spending leads to the fastest economic growth, but that government spending in some contexts stimulates the economy just as effectively as tax cuts or more so.

[aaasssfffdddiii]

@guidedmarkets Explain to me how you can say that government spending stimulates the economy while also acknowledging that larger government harms an economies growth rate. Once a government gets past about 15% of GDP, extra spending hurts the economy. I would like you to explain this seemingly contradictory statement.

[guidedmarkets]

@aaasssfffdddiii I have neither acknowledged nor denied that; I'm just sticking to the original point despite your attempts to recharacterize my claims. You're arguing that "larger government" (a so far undefined concept) slows economic growth. I have not made any claims about what a "large government" does or does not do to growth. I am saying that different kinds/contexts of government spending may stimulate the economy quite well in comparison to some kinds/contexts of private spending.

[aaasssfffdddiii]

@guidedmarkets That's simply not true. When government spends a larger perecentage of GDP, the economy slows down. That is an empirical fact. You focus on the idea that government spending sparks demand. You forget, however, that saving and investment are, in fact, more important for growth than consumption. Furthermore, government spending raises revenue through high taxation, which further reduces growth by distorting economic decisions and reducing labor supply through disincentivizing work.

[guidedmarkets]

@aaasssfffdddiii It's not that what you're saying is wrong so much as that it ignores half of the facts and paints government spending as an evil rather than an important but insufficient component of a larger process that creates growth. Can the government tax so much that it interferes with growth? Of course—but the idea that using government to stimulate demand isn't important, or that government spending on things like infrastructure, research, or education don't help, is just ideology.

[aaasssfffdddiii]

@guidedmarkets Anyone Who Opposes the Use of Government Spending for Stimulus is only using Ideaology?!?

That is quite a statement. I agree that government should spend on military, public safety, court system, and some basic infrastructure. However, government spending is not a stimulus. Again, government takes money from the productive sector and spends it on politically popular programs as opposed to economically efficient programs. Plus, the taxes used to finance it disincentizes work.

[guidedmarkets]

@aaasssfffdddiii It's ideology because no actual economists believe government spending is incapable of stimulating the economy. You can keep mentioning potential problems with some forms of government or with too much taxation, and some of your points have some validity. But these possible problems can't fully negate the growth benefits of using borrowed and taxed income to create demand and, among many other things, a healthy, educated population who can get easily and safely to and from work.

[aaasssfffdddiii]

@guidedmarkets No actual economists believe that government spending is incapable of stimulating the economy?

I hope this is a joke. You seriously don't think any economists believe government spending is bad?

This statement shows a blatant disregard for facts, economics, and reality. It happens to be the economists who, mostly, claim that larger government hurts growth. To be honest, it is hard to take this seriously if you are going to embarass yourself with a statement like that.

[guidedmarkets]

@aaasssfffdddiii Back to recharacterizing my statements to try to make me look silly, huh? Plenty of economists are skeptical of many forms of government intervention (and so are we!). There's a lot of disagreement among economists about the extent to which government should spend money. Almost none are totally opposed to government spending, however, and the jump from this to the idea that most economists believe government spending can *never help the economy* is a rather large one.

[aaasssfffdddiii]

@guidedmarkets You are mischaracterizing my statement. You said that all economists believe spending can "stimulate" the economy. This suggests that you think all economists believe in keynesianism, which is not at all true. All economists do believe their should be a government, as do I, but many do not believe in stimulus spending. By the way, keynesianism is a widely discredited theory, both theoretically and empirically. I call it keynesian mythology, which is more accurate.

[guidedmarkets]

@aaasssfffdddiii Keynesian economics (which, incidentally, is very far from discredited, and in fact there's been renewed interest in it during the last few years) doesn't have much to do with it. No economist is going to deny, for example, that building transportation systems (buses, roads) that allow people to get to work will have effects that stimulate the economy. Some might claim that this would be better done by the private sector, but this is immaterial to the point we're arguing.

[aaasssfffdddiii]

@guidedmarkets I took your comment as meaning that you think all economists agree that the government should "boost" aggregate demand. If not, that is my bad. Yes, the government certainly has basic responsibilities. As for keynesianism, the data that shows excess government spending hurting an economy is a major blow. You should read Henry Hazlitt. He wrote a chapter by chapter critique of Keyne's book. It was devastating, yet academics and politicians continue to buy into keynesian myths.

[guidedmarkets]

@aaasssfffdddiii *shrug* Well, I wish I could say I agree, but I figure agreeing that there are things government should do and things it shouldn't is probably as close to an agreement as we're going to get to.

[aaasssfffdddiii]

@guidedmarkets Ya, that is a point we can agree on. The reason I commented on this video was that it claimed that my opinion is nothing more than a myth. I simply pointed out that, in fact, there is alot of evidence that governemnt spending hurts the economy, while lower taxes help the economy.

[guidedmarkets]

@aaasssfffdddiii Right, but alas, this shall remain a point of disagreement between us.

[aaasssfffdddiii]

@Beingism There is a reason that France, and Europe in general, has performed so poorly over recent decades. Their government is too large and their taxes are too high. According to your theory, they should have had a much stronger economy than we do, yet the opposite is true. I will mention again, and I want to stess this point, there is a lot of economic research on the topic of economic growth and government size, and almost all of it shows bigger government hurting the economy.

[guidedmarkets]

@aaasssfffdddiii More equal developed nations (including the European nations with more taxation) consistently perform better on measures of actual well-being than less equal developed ones like the US. Even if you're just measuring GDP (which is a very poor measure of actual success), there's plenty of evidence that contradicts your position, as noted in the text of this video at beingism[dot]org/community/?q=­node/13 .

[aaasssfffdddiii]

@guidedmarkets Your claim was that tax cuts don't stimulute the economy. I never claimed that lower taxes led to better social outcomes. I did claim, correctly, that lower taxes ans smaller government lead to stronger economic growth, which they do. You see, lower taxes promote more productive economic behavior. This assertion is also supported by empirical evidence on investment, taxable income reported, entrepuenership, and hours worked.

[guidedmarkets]

@aaasssfffdddiii Sure, but you went beyond that claim when you said that Europe performs poorly when it doesn't. You keep making claims about empirical evidence, but what evidence are you referring to? There is no consensus of research or economics supporting this position.

[aaasssfffdddiii]

@guidedmarkets Europe does perform poory in terms of economic growth. Particularly, countries with big government perform poorly everywhere (yes, there are a few exceptions). Again, France is a classic example of European economic stagnation.

[aaasssfffdddiii]

@guidedmarkets Consensuses are rare. However, there is overwhelming empirical evidence showing that larger government size reduces economic growth. I don't have room to cite them all here. Of course, there are studies that don't agree with this, but a vast majority do show that larger government is associated with less economic growth.

Would you seriously disagree with this?

[guidedmarkets]

@aaasssfffdddiii Just give me a taste of two or three independent studies with no funding conflicts of interest that support your conclusion, then.

Economists tend to agree when there is overwhelming research supporting a conclusion.

The phrase "big government" is vague; I avoid it. What I would seriously disagree with is the idea that government spending isn't approximately at least as effective as tax cuts when it comes to stimulating the economy, which is the original claim.

[thegillotine09]

You guys should probably take Macroeconomics. Lower taxes = more money for consumption = higher aggregate demand = lower unemployment. Taxes are generally high during times of growth because that lowers the inflationary gap.

That being said gov't spending also stimulates the economy by increasing aggregate demand.

Individual spending is more closely tied to demand than government spending. People know more about what they want than the gov't does.

[lomocan]

Well, I've read all the comments, many people have already refuted your arguments very successfully & it seems you've no grasp of basic economics, sir. So you'd do well, to just put your political ideology aside for a while & just focus on learning at least the basics of economics & then get on the journey of deciding which political ideology you'd want to support.

[lomocan]

@ineptsegue

"If there is no system to stop powerful people from transforming their once-libertarian society into one that bestows wealth upon them unfairly, they will do so"

Yeah & they do so by selling masses the false "egalitarian socialist ideology". Your statement basically concedes that WHILE the society was libertarian it was working alright but it went bad AFTER "powerful people" turned it into an unfair system SO the solution is for people to NOT LET GO of libertarianism.LMAO

[ThePuppin]

Hi. Take a basic macroeconomics course. Both tax cuts and government spending (in general) stimulate the economy. It's hard to determine whether one or the other works better or worse because they can't be analyzed and experimented with in a vacuum.

[enomarekim]

@ineptsegue

the more things that are produced, the cheaper they are, and the more people can buy them.

[christo930]

This is why helicopters and yachts aren't mass produced. I don't understand what you are trying to say.

[Beingism]

I'm trying to say that during an economic recession, spending money stimulates the economy much better than saving it does.

[christo930]

The US is in a recession because we put massive amounts of resources like equipment, capital and labor into building houses because the fed blew up a housing bubble. The housing sector and all the jobs it supports needs to shrink back down to free capital and labor to pursue other economic activity.

[Americaisgreat123]

You ignore my points also. THE GOVERNMENT CANNOT MAKE MORE LAWS JUST BECAUSE A BUSINESS WANTS IT TO. THEY ARE LEGALLY BOUND BY THE PROVISIONS IN THE CONSTITUTION.

Only a businesses that wanted to waste their money and hence be less competitive and go out of business - would lobby a laissez-faire government. But to lobby a big government that grants favors and regulation, it pays them to spend, spend, spend.

[Beingism]

So long as businesses can buy elections (in the absence of public funding), those businesses will continue to elect politicians who ignore the law or change it to suit them.

[Americaisgreat123]

No, because if the government for example followed the constitution to begin with, we would have never had a bank bailout or the corporatist "stimulus" bill because the constitution does not allow for the Congress to do those things. They are not listed in the short list of things they are allowed to do under Article 1, Section 8 of the Constitution.

Big businesses loves big government because then they can rent seek by using government to their advantage to stifle competition.

[Beingism]

Without government, there is no one to enforce the Constitution or any other form of law or regulation. The question isn't whether to have government, and it's not even how big it should be. It's how can we have an effective one.

[Americaisgreat123]

As a free market libertarian, I practically agree with everything you said above.

In a free market, businesses have no use for lobbying or being friends with politicians because those politicians are powerless people with hardly any money.

Businesses should have private profits AND losses. They are entitled to what they earn when their customers are rewarding them, but if their customers don't reward them with their business, they should be free to fail.

Big government breeds corporatism.

[christo930]

That isn't true. If people don't save, where does capital come from? The printing press? What do you think increased the wealth gap between the rich and the poor during the 2000s? Do you blame the tax cuts? I don't. I blame inflation. The rich earn nearly all their money in current dollars, while the rest of us earn dollars from 10 years ago. It was the huge amount of inflation caused by the war, the low interest rates and printing, deficit spending and new money

[Beingism]

Christo, I'm unclear on what you're saying isn't true. You were saying that the act of people saving money stimulates the economy. I was saying that that doesn't make much sense.

[christo930]

Saving money allows production to grow through capital investments made possible by the savings. Capital investment makes things cheaper to produce and allows new things to be produced.

[MigDanskeren]

I am not your friend.

I provided a bit of information to straighten out one of many flaws. You are free to not use this information and remain in your own ideological world.

[DarthKazi]

Myth:  Egalitarianism is fair to all people.

[DarthKazi]

Saving allows future development. Artificially lowering the discount rate of interest at its source, stifles and misjudges future development. History proves this time and time again. "Economic growth" relative to a small elite who control government, media, industry, etc... can be as contrived and fake as any sci-fi novel. That is what we have. What you propose... a system of wise and benevolent elders evenly distributing wealth, not only undermines nature, but is impossible.

[DarthKazi]

But no such governmental system has ever existed in the history of mankind. So your idea of a "benevolent socialist regime" is, at best, a wet fantasy. The Soviet Union in all of it's failures didn't have any trouble keeping the majority of the capital in the hands of a small elite.

[DarthKazi]

I would say that it is not a myth, but an impossibility as long as government-favored banks control the issuance of the money supply and indebt the user by simply having it.

A "collective system" never prevents such things, but increases the likelihood of future malinvestment, due to the forcing down or up of the discount window rate of interest against a market equilibrium.

If you are saying that government can prevent booms and busts, I would say that is a true myth and a oxymoron.

[christo930]

MUCH better to have a gov official decide who gets what under what conditions! Capitalism isn't perfect, but it has raised more people out of poverty than any other system the world has ever known.

[DarthKazi]

And what the Keynesians don't understand, is that a "free market" would put all business owners on an equal playing field... not forced egalitarianism, but the allowance of success or failure, based on the effort and innovative ability of the entrepreneur. What we HAVE, however, is a system that taxes the winners and bails out the losers.

If the goal is to wreck a system emergent of free choice, the Keynesians are doing a bang-up job!

[DarthKazi]

The government spending paradigm, is simply to mitigate the problems created by similar actions years prior. Sure, mal-investment and corrupt business practices can be blamed on some private tycoons... however, bailing them out encourages more bad behavior. Regulations just benefit the most wealthy elite and screw smaller firms trying to make a competitive run. That is part and parcel of modern regulatory action: Protect your Bilderberg buddies by passing laws to stifle competition.

[DarthKazi]

I'm not saying it doesn't, either. However, what I'm saying, is that Keynesianism is based on the concept that, "In the long-run, we are all dead". So said the man with no children...

Sure, a contrived, discount-rate controlled monetary system requires constant maintenance by Ph.D. Economists and expert banksters, in order to avoid major problems, just like the government has to bail out loser zombie firms that would be deemed unnecessary in a truly free market.

[christo930]

And a public with a high savings rate DO have money to spend on their services. A public deeply in debt doesn't have any money to spend on new services. YOU have it backwards.

[DarthKazi]

The concept of "savings" has been lost to average people because they can't afford to. The contrived monetary system we are in, forces average workers to spend everything or use credit. However, the big creatures of government corporations still save because they have real stuff to move and, because of their special favors given by government have unmatchable buying power, so small private owners have no chance.

In this paradigm, "money" is debt and is determined by laws, not by free choice.

[DarthKazi]

Right. You think people (like you and me) should not have control of their own destinies, but leave it in the hands of Keynesian Ph.D. Harvard grads with government powers.

Cool. Gotcha...

[DarthKazi]

Of course people don't want to save the fake funny money we have today, considering it is backed only by IOU's given to bullied third-world nations who are actually productive, unlike us. We have an awesome military, not to protect us from "the enemy" but to protect the real enemies (bankers, government shills, corporate heads) from truly productive nations deciding they don't want to take our IOUs anymore.

[DarthKazi]

So since people have no confidence in saving (true capitalism) they resort to spending it as fast as they make it, because they know price levels will rise or, in other words, the funny money will continue to debase greater than the interest paid to them for saving it.

This is why "government spending" can stave off current problems but it cannot solve long-term ones.

[DarthKazi]

Corporations have nothing to do with "laissez-faire" and government spending is just another way to support giant corporate entities that get special government privileges like the Military Industrial Complex and giant Wall Street investment banks: Enter the bailouts from the 1970's till today.

My points are perfectly relevant. You say government spending > people making the decisions for themselves how much and what kind of money should exist in the market and if they can/cannot save it.

[DarthKazi]

You are not responding with any facts, but opinions driven by assumptions based on no facts whatsoever. Kind of frustrating....

[DarthKazi]

You fail to grasp that "corporate" is a government privilege to investors to operate a business as "members" without any ownership risk and stake in it's failure. The whole concept of "corporations" is a Hamiltonian/Federalist concept that allows the elite to control industry more effectively because they have less stake in a company's failure. Then government buddies can subsidize certain ones and make them "too big to fail". This was Nazi Germany and America today.

[DarthKazi]

Have you ever worked for a poor man?

[DarthKazi]

Besides, it is vastly oversimplistic and naive to presuppose that the rich DON'T spend their money. Most of the money these fat-cats have, is in investments in capital goods, properties and the biggest one...labor. If you did any real economic study and research, you'd know that the vast majority of investment capital is paid towards labor and capital goods. Besides, a rich man moves a million times more stuff than an average person... why should he not be richer?

[DarthKazi]

Yes, and people would have all of their money to spend on goods and services, if a portion of it wan't being siphoned off to off-shore banks whilst the "government services" they assume are being provided by "taxes" are being provided by interest-bearing Central Bank loans to the government.

[DarthKazi]

"there's a problem with a system that leaves most of the wealth in the hands of people who don't have any incentive to spend it,"

So, you and I can't save money? If you or I were billionaires... we shouldn't be allowed to save for the future. "Capital" is savings. "Ism" means "an advocacy for". Capitalism is nothing more than the idea that money is saved for future needs. In your colloquialism-driven world of fantasy, money should be constantly spent and government should bail out losers

[DarthKazi]

"Unregulated capitalism is what leads to boom and bust cycles"

Absolute nonsense. A market driven by "wanters" and "havers" never booms and busts. Even during the 19th Century, the only major cycles were caused by government tampering with the money supply or allowing banks to not pay real money for notes (suspending private contracts). Those are facts.

; there's a problem with a system that leaves most of the wealth in the hands of people who don't have any incentive to spend it

[christo930]

The Chinese have the highest savings rate in the world at over 30% and their economy is growing by nearly 10% a year (doubling in 7 years). Exports make this possible. America's economy has gotten progressively worse as our savings rate has plummeted from over 10% in the 80's to negative today.

[MigDanskeren]

I'm not going into a serious debate about this ans I don't expect any productive results from that. The arguments provided in your link is so flawed that any real economist or scientist (like me) would not even know where to begin.

[christo930]

You show a fundamental misunderstanding of economics. Saving money is what leads to economic expansion, not consumer or government spending. The only exception is spending on infrastructure which facilitates economic growth through better efficiency. When a tax cut results in increased savings, those savings are made available to entrepreneurs and businesses who create new jobs and new wealth.

[MigDanskeren]

Saving (investment) has a direct positive effect on economic development. Thus cutting taxes for the wealthy would be more efficient.

[DarthKazi]

Markets are the only way investments can be made that account for consumer time preference. Interest rates should be free to fluctuate based on saving or spending.

Nobel Laureate Friedrich Hayek produced the only workable explanation to business cycles, since it accounted for why capital goods industries always boom beyond consumer goods. People are spending, yet interest rates reflect "saving".

It's the Fed's fault, not the "free market".

Quit while you're behind, guy...

[Avarice176]

+1 for familiarity with austrian economics :D

[DonJack1776]

Tell me a single society in which a "free market" has ever existed. Not a single libertarian/whatever can ever seem to be able to answer this question. The "free market" is a utopian fantasy.

[DarthKazi]

Medieval Europe had numerous examples of free markets.  The original Bank of Venice, for example, was free of governmental control and, at that point, interest was based purely on consumer time preference and the supply/demand of money. At many points in English history, Kings stayed well away from the market and allowed mercantilism to govern itself.

Most of the 19th Century in America were laissez-faire. With the exception, of course, for the 9 war years.

[DonJack1776]

So are you saying that we should go back a medieval way of life? I hope not.

In 19th Century America, the government gave corporations huge subsidies and countless sweetheart deals. In fact, the development of any modern capitalist economy requires brazen violations of market principles.

[DarthKazi]

No. I was answering your question. There have been numerous societies and histories in which free-markets and laissez-faire not only was implemented but worked.

Your last sentence is true. You cannot have freedom when government steals property from hard working people to bail out losers (both non-working people and failing corporations). "Modern Capitalism" is theft for the benefit of corporate coffers and government shills who enrich them.

[DarthKazi]

A study of the 18th-19th Century (including Colonial times when England was not banning mints and sovereign notes) shows prices fall and wages rise when the government stays out of markets. However, during the War of 1812 and the War of Aggression against the South, prices rose wildly and wages dropped. The 1880's were the best example of laissez-faire, when the Greenbacks were finally put to rest; prices fell more than any other time in America and wages rose in accord.

[DarthKazi]

The only utopian fantasy I see, is the ASSuption that government can magically fix anything or help anybody without having to steal to do so.

Socialists are the utopians. The free market advocates are the realists, since economics is not a mathematical formula: It is the bald truth that a cheetah must catch a gazelle, or it will die.

[DonJack1776]

check out their video "Myth: Socialism trusts government too much."

[brodie42092]

and communism/socialism isnt?

[LeftPolitiko]

no. and i did you just concede my point?

[LeftPolitiko]

this is my new user name by the way.

[avengemm9dog]

Tax cuts for the poor, Rich, and Middle the class.

[Americaisgreat123]

You are completely wrong about FDR. He did not get us out of the Great Depression. In fact, his New Deal precisely caused the Great Depression to be prolonged until the early-mid 40's, when we were plunged into WWII. "Dr. Win the War" was better on economics than "Dr. New Deal." The New Deal was a political success, but a major economic failure. Too bad most historians are uneducated on economics.

I suggest you educate yourself. For a start, read Amity Shlaes book, "The Forgotten Man."

[DarthKazi]

Yes, FDR's programs created price increases (making it harder for consumers to buy goods) and the jobs that were created did not accumulate private wealth to stimulate wages and capital investments.

Keynesian policies are destructive to market balance and CAUSE the boom and bust cycles, instead of abate them.

Bubble-nomics, which this guy advocates misallocates capital into unsustainable future investments that always crash.

The Keynes solution, is more inflation and on and on we go...

[Americaisgreat123]

You said that a substantial part of a tax cut will be saved. That is wrong. You are thinking of tax rebates which are worthless. Tax cuts permanently reduce the rate of taxation.

For the record, ideally, I oppose tax cuts. Taxes should be so low, flat and fixed that the government cannot reduce taxes. Most sophisticated macro-economists oppose using fiscal policy. When the economy slumps, the government should ideally, do nothing. Politicians will never do this.

[lomocan]

@Americaisgreat123

"When the economy slumps, the government should ideally, do nothing. Politicians will never do this"

Words of wisdom lol Yes, they should NOT be doing ANYTHING but of course, very few people actually understand economics so people expect politicians to do something & it only messes things up even more & people suffer even more than they would've; problem obviously is incompetence of masses to understand economics & they pay for it, that's Nature's free market in a sense.

[Americaisgreat123]

The government takes, borrows and prints $ They have to divert resources to spend.

"A visual representation of the stimulus package is: Imagine you see a person at work taking buckets of water from the deep end of a swimming pool and dumping them into the shallow end in an attempt to make it deeper. You would deem him stupid. That scenario is equivalent to what Congress and the new President proposes for the economy."

-Walter E. Williams, head of the George Mason University Economics Department

[Americaisgreat123]

"Massive government spending likely lengthen the economic struggles each time. I don't know why Obama said all economists agree on this, they don't. If you go down to the third tier schools, yes maybe, but they're not the people advancing the science.

-Edward Prescott of Arizona State University - Nobel Prize winner

[Americaisgreat123]

"This is probably the worst bill (stimulus) that has been put forward since the 1930's. I think it is garbage."

-Robert Barrow of Harvard University

"It's not part of what anybody has taught graduate students since the 1960's. They are fairy tales that have been proved false. It is very comforting in times of stress to go back to the fairy tales we learned as children, but it doesn't make them less false."

-John Cochran of UC - he also said "public prayer would work better and cost a lot less"

[Americaisgreat123]

The clear link between low taxes and high growth: The 1980's - We drastically lowered taxes and yet revenue to the government went up. Why? Because by lowering taxes (see the laffer curve - if you even know what that is.....), we created an inventive to produce. The increase in taxes in the 90's was quite small on scale. The economics of the 60's set the stage fro the lost decade almost of the 70's when Keynesianism was proven to be a colossal failure once again.