The Conservative Economist vs. the Liberal Economist

We here in the United States have had it pretty doggone good for a long, long time. We’ve been riding the gravy train for decades, borrowing from tomorrow so that we can have it all today…

opaApril 18, 2009 — In the wake of nation-wide “tea parties” on Tax Day this year, another teacher and I had occasion to discuss our different views.  In as much as his political persuasion is strongly conservative and mine is more liberal, I celebrate the fact that we are able to have civil, respectful discussions like this. He, by the way, used to teach advanced macroeconomics at the high school level while I teach the same subject currently.

My colleague said that he thought these protest demonstrations (they were a pretty big deal for conservative voters here in Texas) were entirely appropriate. My position was that they were less about taxing and spending and more about protesting the fact that Democrats have taken control of Washington and are now in a position to push their liberal agenda on a wide range of issues. Based on some of the protest signs I saw in news coverage by the various networks including Fox, I also said that I thought many attended because of the outrage they feel at having an African American in the White House. He disagreed saying that he thought the primary focus of the demonstrations was on the economy and that the right thing to do to combat the recession would be to reduce taxes even more and to tighten governments’ belts: local, state and federal.

I reminded my colleague that this is exactly what government did prior to and during Hoover’s one term as president. This was during the recession that took hold of us in the 1920s, the resession that bloomed into the Great Depression of the 1930s. We have learned from that experience, at least some of us have, that tightening the money supply and reducing government spending only serves to exacerbate the decline of aggregate demand, and it is aggregate demand that drives the economy, not aggregate supply. Supply only follows demand or the anticipation of improved market conditions as businesses  have no motivation to produce goods and services that cannot be sold — hence higher unemployment during recessions. My colleague teaches U.S. History now, by the way.

My colleague countered with the view that raising taxes on people who earn $200,000-plus, which is what he said the president’s tax provisions in the current budget plan will do, will hurt small businesses causing them to have to scale back on production and services.

Hmmm… no one, it seems, enjoys having to pay taxes, but — and I pointed this out to my colleague — the Obama administration and the Congress is not raising taxes this year on people making more than $200,000. Their taxes will not change until after the Bush/Cheney tax cuts expire, and that won’t happen until the end of the year. When it does, their marginal rate will increase by only 2 percent. This year, everyone making less than $200,000 will see their federal taxes decline.

taxdataWe here in the United States have had it pretty doggone good for a long, long time. We’ve been riding the gravy train for decades, borrowing from tomorrow so that we can have it all today, which has allowed the rich to get ever richer while the earning power for all the rest of us has actually declined. Investment bankers and senior executives of major corporations are laughing all the way to their off-shore, numbered bank accounts. According to the text book from which I teach my high school seniors, because of inflation and the demise of manufacturing in the United States, the minimum wage, as a percent of average manufacturing wages, buys only about 70 percent of what it did in 1968.

On the right is a listing of countries’ average taxes paid in 2007 by citizens as a percentage of their GDPs. Notice how the United States is ranked. I found this information on the Internet at Wikipedia. The data came from a publication by the Organization for Cooperation and Economic Development. After Obama’s tax cuts for 95 percent of the population are approved and implemented for 2010, we will probably be paying slightly more than South Africans do. Can you even imagine what Japan’s taxes would be like if they had anything like the defense budget to fund that we have? Further, since Obama’s cuts target the preponderance of citizens who have the highest propensity to consume, our aggregate demand will increase and short-range aggregate supply will respond returning us to full employment — eventually, all of which is text book macroeconomics. So, I told my colleague, I can’t quite understand why Republicans and Libertarians believe that making the Bush/Cheney tax cuts for the super rich permanent would be a good thing for the economy, unless y’all still believe in Say’s Law, i.e., that supply creates its own demand. Trickle-down/supply-side economics has failed us. That is why we are in our current situation. That is why it is time for change, time for us to adopt the bottom-up approach that Obama and all his economic advisors support.

Yeah, but what about the massive government spending in the Democrats’ budget plan for 2010? It’ll generate a 1.2 trillion dollar deficit at projected revenue levels. Yes it will. But where was the conservative base of the Republican Party for the previous eight years? Why weren’t they protesting the spending that exceeded revenues during the Bush/Cheney years, years when we weren’t having a recession, years when we should have been balancing the budget or better yet, paying down the national debt — saving for the next business cycle decline. During the Bush/Cheney years  the national debt grew from $5.66 trillion to $10.62 trillion? So, the only truly conservative president we’ve had in recent years was Bill Clinton.

 National Debt

Yes, once we are out of this recession, it is reasonable to anticipate that tax levels will rise for those who can afford it, especially if reasonable leaders are still in power and if we don’t get control of rising health, energy and education costs. But we’ve a debt to repay to future Americans, my sons and daughters and yours.  We need to be about repaying it – and I for one think that those who can do more should do more.

No, the tea parties were not about taxing and spending — big government vs. small government.  No matter what the demonstration organizers claim, the demonstrations were about a whole host of “social” conservative-value wedge issues, issues like abortion, gay rights, gun control and… sadly, race. Yes, race. The demonstrations were about consolidating elements of the GOP that have been fragmented by the last two elections. The demonstrations were about salvaging the Republican Party in advance of the mid-term elections in 2010. And if some in attendance actually thought they were there about taxing and spending, they were misinformed — misled by the money interests in this country, which are the real base of the Republican Party.

When the Bush/Cheney tax cuts expire in 2010, the rich will still be rich and everybody will be better off with the economy on the mend.

I invite your comments whether pro or con.

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Published in: on April 18, 2009 at 10:59 am  Comments (33)  

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  1. I could not disagree more. The tea-parties were reminders that the people do not want or appreciate increases in their taxes. Perhaps liberals are too excited about re-engineering the culture to see beyond that.

    I resent the charge that conservatives object to an African American President. We do not. If conservatives as a whole did, Obama could not have won the election. He needed the white vote to win. I strongly suspect throwing out the race bias slam is simply an effort to discount the legitimate concerns of these people and belittle them through name calling. Perhaps you didn’t do it with a conscious intent but your bias seems to have led you that way.

    Many of us (conservatives) were disgusted with Bush as well. He was no fiscal conservative. Running the debt up, (both Bush and Obama,) is likely to ultimately lead to default. The “rich” (which I assume will sooner or later be defined as >$100K or top 5% I think) do not possess enough wealth if taxed at 100% to cover all this debt and if we cull that down to the top 1% they cannot cover the 2010 budget at 100% taxation. Taxes will have to be raised on everyone. Its a fact of logic.

    Even so if they nationalize health care, I predict default before 2020. To digress, I’m not saying something doesn’t need to be done just that nationalizing has never led to cost efficiencies anywhere. I have the education and was never taught, by even my most liberal professors, of a nation that nationalized industries, (especially high cost ones,) and produced a more efficient cost-effective process. India nearly went bankrupt and starved, USSR did, Puguet is a french boat-anchor, people are dying in Britain waiting for surgery. I personally would loath to live in a nation where cancer was a government mandated death sentence.

  2. Thank you for your comment, AmericanIdiot — sorry, but you did not leave your name, just the title of your blog.

    It is sad, yes, but I do believe that some, not all by any means, but some who align themselves with the political right are racist. I hear and read much in comments posted to news blogs that have convinced me of this. Racism does survive in the United States and racial supremist groups are waxing in response to Obama being in the Whitehouse. Why, just this week the Department of Homeland Security warned of supremist groups expanding membership and stockpiling weapons. http://www.eastvalleytribune.com/story/137942. I cannot believe that you or anyone else thinks that these people are liberal thinking. So, if they are politically active at all, they must all be voting Republican or Libertarian. Dah…

    On your comments about health care in the socialist democracies of Europe and in Canada — from where are you getting your information, conservative talk show hosts? Yes, some wealthy Canadians do come to the U.S. for medical procedures. But we’ve got Americans now traveling to India for medical procedures too because of the high costs for such procedures here in the U.S.

    According to the World Health Organization and the Organization for Economic Cooperation and Development (OECD): life expectancy in Canada is 80.4 years compared to 77.8 years in the U.S.; the infant mortality rate is 5.4 percent in Canada compared to 6.9 percent in the U.S.: the per capita expenditure on health care is twice as much in the U.S. as it is in Canada (6,714 to 3,678); health care costs as a percent of GDP are likewise skewed (15.3 percent in the U.S. vs. 10 percent in Canada) http://en.wikipedia.org/wiki/Health_care_in_Canada.

  3. Thanks Opa for your very interesting analogy on the New Boston Tea Party. I was looking for someting other that what I saw during this demostration against higher taxes BUT alas, it was not there. Truly I believe it was all about Mr. Obama being in the White House and if not, why weren’t these people prostesting four or five years ago. I really hate to see race brought into the conversation but in the back of many minds, that is what it is. I have lived a great many years (thanks be to God) and I have seen good things & bad things on both sides of the aisle and I would hope that we would grow up and live out our lives in a more loving manner. Personally, I do not care the color of the president as long as he is a decent, caring, educated, knowledgeable & an articulare human being.
    I am still waiting for America to return to producing goods right here on American shores. As far a health care goes, I hear stories every day about our health care system that really send chills down my spine. I also have very good friends in other countries and they do not seem to envy our system. I believe we should study what goes on in these other country and build our health care system to fit our need and yes, I believe in the concept of country taking care of its citizens–from the cradle to the grave. I understand what the President is trying to do and I for one applaud him for his stand. I do not believe in abortion or same sex marriage BUT I will not look down on anyone for their right to do as they see fit.
    Why don’t we just live and let live? Some of the most wonderful people I have ever met were gay and we got along marvelously—I respected them & they respected me so what’s the problem? I only wish that some of the so called “straight” people could be half as nice.
    Really Opa, we should not be so judgmental.
    Over the past eight years, I have seen some crazy, scary stuff go on in the White House and whoever these protesters with reference to the tax question were, never once did I hear them utter a word during that time. That in itself tells it all. ‘Nough said.

  4. In retrospect, it was wrong of me to publish my views on conservative economics vs. liberal economics in the way that I did, referring as I did to an associate teacher who is of the conservative persuasion. By obliquely identifying him to others with whom I serve as a teacher I was grievously wrong, especially since my posting included opinions about the “social” views and motivations of many who are aligned in this country with the Republican and Libertarian parties. Obviously, I offended my associate and, for this, I do apologize.

  5. I am holding in my hand the Spring 2009 edition of the SPLC Report (Southern Poverty Law Center) with the headline: “Hate group numbers surge”. The SPLC’s annual hate group count for 2008 identified 926 hate groups – a 54% increase since 2000 and a 4% gain over 2007 (source – http://www.splcenter.org). While the “tea parties” were not in and of themselves overtly racist I am of the opinion that the underlying base of what has become the Republican Party is racist. The public voice of the Party, Rush Limbaugh, is without doubt an intolerant person and a barely veiled racist. Bill O’Reilly, Shawn Hannity, and their “fellow travelers” seem hell-bent on spinning everything President Obama does in the most negative way possible. Is this really how we go about getting our country out of the deepest ditch we have been in since the 1930′s? While I deeply believe in the rights of those who protested on the 15th I also deeply believe they are on the wrong track.

  6. I too noticed the tea parties being but a gathering for the lowest denominator of our society. Perhaps that was not the intent, but it was the end result! Were there other less innocuous people there that day… of course, but by and large the whole Tea Party thing (which was propagated by Fox News) was a joke in and of itself!

    Why was it a joke you ask… because it seems that not a one of these people protested or screamed or showed any anger the last eight years that the Republican party gave away the bank to the rich and striped away the hopes and dreams of millions of Americans.

    I sometimes wonder that if we were to take photos of demonstrations during the Clinton years and compare them to ones from the tea parties from this last Apr 15th if many of the same faces would be there?

    As for the old adage “You must spend money to make money” is only true if the money being spent is spent on things that can actually make wealth for the many… and not wealth for a small handful of greedy… um… people.

    I can also be seen @ MMfA.org

  7. Hi Opa. Thanks for this posting, and I have to say I couldn’t agree more. I have asserted many of the same sentiments you posted to conservative friends of mine, but to no avail. They can’t seem to see past the whole lower taxes for the wealthy mantra. I find it quite remarkable that middle class friends and relatives of mine seem to be more concerned that the wealthy will be taxed a few more percent than they are about the balances in their own bank accounts.

    I’m a scientist, not an economist, so I’m not real well versed on some of the finer tenets of conservative vs liberal economic policies. However, as a scientist I do consider myself a keen observer of many different types of systems (political, sociological, economic). It seems apparent to me that if you take 100 people and divide money between them, that it will be more efficiently spent when that money is divided more equitably versus when one or just a few get most or all of the money. As an economist, let me ask you… Is it not true that an economy remains active and viable when people are spending money (creating aggregate demand), and that that is done more effectively when a larger proportion of the populace have the means to do so? If that is true, then I can’t understand this mantra by the conservatives touted during this last election, that it is ONLY the wealthy that generate jobs. I said to some of my conservative friends and relatives…”no, its people spending money that creates demand, and that it turn creates jobs.” They seemed to be perplexed by this statement, and never had a counter argument. It’s amazing what can happen when someone is capable of rational, independent thought, and doesn’t just echo the thoughts of neocon talk radio show hosts.

    As far as the tea parties go, I have to agree with your sentiments that there were many more social, divisive wedge issues on the agenda. I observed that too in several speeches at the one in my hometown. However, I do think it’s unfair to paint all of the attendants in some racist light. I do think that many were primarily concerned with the government’s economic policies. But, the conservatives cannot deny that a racist element was a part of the protest, and that people/groups who espouse xenophobic ideologies are among their political bedfellows.

  8. Yes, KW. Empirical data do confirm that low to mid-level wage earners spend a much higher proportion of their personal disposable incomes (PDI). The wealthy save more, which is simply the opposite of spending. and saving is not the same thing as investing. The wealthy have no incentive to invest, which is to purchase new capital for the purpose of production, in the absence of demand or the prospect of improved business conditions in the future. This is why a more equitable distribution of wealth would be better for our economy as a whole. It is also why economists say that our progressive income tax is an automatic stabilizer for the economy. Perhaps if it were more progressive, we would not experience such frequent and severe business cycles.

    Thank you for your comment and the intelligent question.

    Opa

  9. Opa, thanks very much for taking the time to respond to my question. I will bookmark your site, and come back for future blog posts.

    Regards,

    KW

  10. Opa, while I really enjoy hearing different points of view than my own, I find it shocking that nobody that has posted here really seems to understand a fiscal conservative. I consider myself a Libertarian and i believe on principle that humans are entitled to their freedom at that the government, especially the federal government should interfere with as few things as possible. I believe to create a perfect country you need to find a balance between fairness/equality and stability. Our country is not a meritocracy and should not strive to be one. The truth is that people are all born into different economic situations and it is impractical to think that we can provide equal opportunities to all. This does not mean that we should not try through programs that provide financial aid to the poor and even middle class to get through college. to a certain extent I also agree with affirmative action, however I wish it was based more on your socioeconomic standing than your race. Not only is it impractical to try and provide equal opportunity though redistribution of wealth but it threatens the stability for our nation.

    On a less principle-based argument, it always frustrates me when people simplify the economic policy differences of conservatives and liberals. It is the conservatives opinion that higher taxes breeds lower tax revenues. It hardly matters if you cut the taxes of 95% of the people since the top 5% pay more than half of the taxes anyway. This is true in California. We recently raised our sales tax i believe .5% which is pretty significant, and our revenue actually went down. It is true that income tax is a stabilizing force in the economy, however it often retards growth more than it prevents recessions. I agree that too intense of supply-side economics can result in stagflation (as you probably know a period plagued by inflation and recession) due to too rapid of growth that can not be supported by the aggregate demand curve. Since our interest rates are so low right now it is very hard for us to encourage the private sector to invest anymore than we already have. Therefore we must use fiscal policy to either cut taxes or increase government spending. Liberals tend to be in favor of increased government spending (which I am against because of my belief that the larger the population a government is serving the less effective it can be due to the extremely differing cultures it is trying to govern.) Conservatives tend to believe in cutting taxes and they believe that the increased government spending causes too much crowding out from the private sector.

    Short-term unemployment is also always overplayed by liberals. If my tax dollars are going to pay for somebody to have a job that is somewhat unproductive other than the fact that they have money to spend into the economy (and perhaps put back a fraction of what I’m supporting them with from my pocketbook back into my pocketbook), then that is not good enough because it IS A BANDAID. Ya, it is a bummer when your job becomes obsolete, but it is not America’s duty to provide jobs to people whose skills have become obsolete. To a certain extent it IS America’s duty to aid them in training new skills that are not obsolete.

    I will now address the issue of healthcare and in general of nationalized or socialized programs.
    It is impossible, really, to compare America’s healthcare system with countries that have socialized healthcare. In order to understand why this is so, you must understand the importance if the issue of immigration. We have a 2000 mile border with Mexico, a country that is not only far worse off economically than America, but also a country that propagates the belief that Mexican’s are entitled to California, and encourages the exit of poor Mexicans to California, Arizona, Texas and America in general in order to aid their own economy. Now I am just rambling on but I hope that you enjoy this differing opinion.

    One Last thing:

    Going back to a principle-based argument, how do you feel about government employees encompassing over 50% of jobs. How do you feel about the fact that many people who worked for private companies are losing their pensions, essentially so that the government can continue paying its former employees their promised pensions, which are ridiculously generous? Do you realize that the government will slowly gain more and more control over our lives as they attain the voting power of their own employees. and that percentage continues to increase! I realize that much of this information is less than specific, but I would like you to just understand the conservative mindset against the government having too much control over our lives. It is simply too dangerous!

  11. Thank for your contribution… Willard, is it? But I’ve a pretty good understand of the conservative mindset (the operative part of that compound noun being “set”, as in implacable). Conservatives talk a lot about believing on principle. However, the greatest barrier to learning, or to understanding, is often the illusion of knowledge. Liberals tend to be more pragmatic — if something isn’t working, let’s try something else. See my posting on Liberal Thinking vs. Conservative Thinking http://kgarry.wordpress.com/2008/06/02/liberal-thinking-vs-conservative-thinking-this-election-year/.

    John Maynard Keynes once said, “The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist.”

    Keynes, perhaps the most liberal economist who ever lived, was wise enough to admit that he too could be wrong. But we have given Reaganomics a fair try and just look at what it has wrought.

    Opa

  12. [...] Yes, the recovery has been slow and largely a jobless one so far. But this has been because corporations are sitting on their wallets, slow to take advantage of the lowest interest rates for anything much other than buying back shares of corporate stock, which has the effect of driving up share prices. This is why the Dow and the S&P 500 are recovering faster than productivity. The same thing happened in Japan during the 1990s, which makes me wonder why the Fed hasn’t figured this out yet… Low interest rates will not, by themselves, stimulate job growth. Only demand for American-made products and services can do this. See my earlier posting, The Conservative Economist vs. the Liberal Economist. [...]

  13. I have become increasingly interested in politics and the change this country has seen in the last two years. I think you are taking the values of the tea party to a VERY narrow opinion. While there may be some extremists out there, the VAST MAJORITY of people in the Tea Party are sick of the gov’t forcing us to pay higher taxes, and to restrict our choices because we have to make sure that EVERYONE gets things handed to them. Speaking of extremists, how many communist people have rallied for the Presidents agenda? So there are extremists on both sides of the isle. I think playing the race card really needs to stop. I am a conservative, but I am not a racist and nor are the vast majority of conservatives that I know. Actually my adoptive brother is black and a conservative as well and he completely doesn’t agree with President Obama’s agenda either. The reason so many people are against the president is because he wants to make HISTORY by bringing about very liberal, some would call socialist, ideas to change this nation. That is why there is so much controversy. Not because of his race! I must also state, that if you think conservatives are racists, how about the fact that liberals denounce our christian religous beliefs every chance they get. They are just as much BIGOTS in my opinion. Especially people who do not value religion, marriages, parenting, etc, like Joy Behear from “The View”. They continue to seek acceptance for other religions, but then demean christians. You can’t have it both ways. We need to value the multiculturism in this nation, not be bigots and racists because that is getting us no where except more angry and defensive. I also wanted to comment on the economy. To me it seems there are two different points of view on how to create jobs. The conservatives, or shall I say republicans, want to see job creation in the private sector, while I see liberals and dems are pushing for tax money revenue to pay for gov’t jobs. I think this is where the frustration lies. You want to tax the rich, who u see as the enemy, to pay for the creation of gov’t sector jobs. No wonder there is animosity. I mean that’s like taking money out of my sons piggy bank to buy my daughter something. Believe it or not I am a graduate student seeking my Masters degree in Social Work. While the majority of my classmates are seeking to provide additional gov’t expenditures, I am seeking to find out why we are still trying to create programs and services. We should be funding programs that work, and eliminating those that don’t. I also truely beleive in Clinton’s work & responsibility act. People who need assistance should get it for a brief period of time, provided we can get our country to provide jobs again. And then they should be forced to find the incentive to stick with the job and work their way up the economic ladder that so many people have done. Now I must say I do think we have inequalities in both pay and education. But again, why don’t we have the answers for these problems (w/ over 100′s of years of economists and social theorists). Because we are playing tug of war between socialist and far right conservatism. We need to work together to create programs that assist in job creation, employment, better wages, lower health care cost (not socialized programs), equally funded educational programs, and equal distributions of tax rates. Villifing the rich to pay for the poor is unfair. Keeping wages too low that push the poor onto welfare is unfair. Having property taxes pay for education is unfair., ETC, ETC. But we need to go about change so we are not taking from one class, primarily, to provide for another. Sorry this is so long winded but i’m sick of the tug of war, and the race cards being played. This isn’t helping to get people to unite.

  14. I also wanted to ask u another question. It seems to me that during the Reagan Years our country was fairing well, aside from the 1987 (or so) years. And under clinton he was given a good economy and the dot com years which gave him a good run as well. I do love that liberals want to say that he had a surplus, yet he took money from social security to pay down the public debt and now look where we are. I also don’t think it’s fair to blame Bush for the Economy, soley. Liberals don’t think it’s right that we try to protect our country by being at war, so therefore they are against the debt we incure from this. Just like Conservatisms don’t like to pay for the dependant poor, which we incure debt. So spending for both these issues has become WAY too large. But to say that Reaganomics doesn’t work, I think is false. When companies aren’t over regulated, and over taxed they provide jobs which in essence provides a person with the means of income to support their family. That’s not rocket science. The problem is low wages, corporate crimes, sometimes ineffective regulations, and people who simply do not want to work because they are struggling with their own STUFF. When all of this is combined things start to crumble. But too many regulations, higher taxes, more gov’t jobs than the private sector, leads to companies leaving states and the country, and in return sounds a hell of a lot like socialism to me. Am I Wrong?

  15. You’re are right, Jillian. I do find it hard to believe that you are pursuing a Masters in social work. Your mindset concerning the marginalized members of our society and government’s proper role would seem to dictate a much different career path for you. Recall the Preamble to the Constitution:

    We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defence, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.

    You obviously interprit the terms justice, domestic tranquility, general welfare, and the Blessings of Liberty differently n do. Nevertheless, good luck with what you’ve decided to do.

    You are also correct, Jillian, in that I have a very narrow opinion of the Tea Party. I categorically disagree with the party’s philosophy and goals, especially with some Tea Party candidates who ran for and/or won political offices in the recent elections. Yes, in a very real sense, our system of government is broken by, as you suggest in your comment, by the competitive nature of our two parties with polarized ideologies. But that’s no reason to cripple government, throwing the babies out with the bathwater. We need a department of human services, an energy department, a NASA, an education agency, an environmental protection agency, a food and drug administration, a CIA, a NSA, etc., etc. And we need these agencies of the administration to do a better job at what they were established by the Congress to do.

    No, I don’t believe that all Tea Party members are racist bigots. Neither do I think that most are on the conservative right. I do believe, however, based on all the hateful things that I’ve heard said and seen demonstrated at Tea Party rallies, that there’s a whole lot more racism and bigotry among conservatives than among liberals.

    Without trying to respond to every point you address in your comment, let me just say that I have concluded that conservatives do not accept or understand what the vast majority of economists accept as true because they don’t want to understand. No, it may not seem fair that society should ask those who are better off to shoulder more of the financial burden for society, but it is logical. Read my article on why the rich should pay higher taxes (http://kgarry.wordpress.com/words-of-wisdom/basic-economic-truths-part-iii-why-the-rich-pay-higher-taxes/). It may not seem fair that the biggest, strongest member of an Infantry platoon should have to carry the heavy machine gun either. But it’s logical.

    If you consider yourself to be a Christian, which your comment claims, read my article about whether Jesus in today’s economy would be more a capitalist or more a socialist (http://kgarry.wordpress.com/2010/10/14/jesus-christ-in-todays-world-would-he-be-a-capitalist-or-a-socialist/). I assume that we read from the same Gospels.

    Lastly, we do have something in terms of common ground. We do need to work together. But the half of American on the right will have to find a way to cooperate with the half of America that’s more to the left. And what’s wrong with a degree of socialism, by the way? Fire departments, libraries, public schools, parks and recreation departments, the Army Corps of Engineers all provide public services. And if you do go to work eventually as a social worker, you too will be part of a socialized program.

  16. Corporations, particularly banks and other financials, certainly weren’t “over regulated” during Clinton’s second term in office through the Bush/Cheney years, and look what that wrought. Market forces alone do not punish irresponsibility, Jillian. Punishment comes after it’s too late, and the punishment is not imposed on the guilty. The punishment is imposed on the people.

    What’s wrong with Reganomics? Everything. It assumes Say’s Law which says that supply creates its own demand. That was proven wrong in the events leading up to the Great Depression and it was proven wrong again and again, most recently in 2007 when the housing sector collapsed. The Bush/Cheney tax cuts coupled with years of defense spending on borrowed money found us all but bankrupt. You are right, it was absolutely wrong for government to tap into Social Security funds. But that was done on Alan Greenspan’s “expert” advice. And back then, nobody took exception to anything Greenspan said.

    People seem to forget that the Great Recession started in 2007. They are also now whipped into frenzy over deficit spending by Obama and the Democratic Congress in response to the worse economic situation since the Great Depression. They forget too that Obama inherited a national debt that had nearly doubled during the Bush years. For more on the State of the Union before and after Bush, go to http://pewresearch.org/pubs/1069/states-of-the-union-before-and-after-bush and read some facts.

    It seems to me that for conservatives today, anything other than Lasaiz-Faire captialism is socialism. Where’s all this Red Scare coming from lately? The mixed enconomies in the world today, taking advantage of the benefits offered by both capitalism and socialism, are giving us a real run for the money (pun intended).

  17. I have gone through and read your comments and the comments of everyone else and now I will add something. the one question i have is if you want to raise taxes on those making over 250000 where is the incentive for everyone else to ever work and get to that income level? all of a sudden a gap is created where if you make that jump into being what someone else has termed “wealthy” you are penalized. thats the problem with the whole idea of wealth redistribution. where is the incentive to become successful

  18. The history of taxes and economic growth in the United States makes it clear that higher individual tax rates do not discourage or disincentivize progress. The 1950s, for example, was a period of rapid growth and expansion of the middle class, even though income tax rates were at 50 percent for individuals making 81,200 and married couples making over 162,000. See http://www.taxfoundation.org/publications/show/151.html. Of course, one must take inflation into account. A good read on this period of time and the factors contributing to our prosperity, read http://ezinearticles.com/?Economic-Status-of-the-United-States-in-1950&id=1565016.

  19. So was the point you are making that the U.S. is only successful because of the military industrial complex? and if so whats the solution?

  20. In response to your question, Scott, let me refer you to a recent response to another reader’s comment to a different post: http://kgarry.wordpress.com/2008/10/19/big-government-vs-small-government-which-is-best/#comment-5538.

    It may seem self-evident to you that higher marginal tax rates disincentivize people from working and/or making investments. But empirical evidence simply does not support this view. For the rich, after short-run capital gain decisions are made, it has always been business as usual. For the almost-rich, more will simply be spent on tax avoidance advice. For the rest of us, should tax rates be increased on the middle class… well, we’ll just have to work longer and harder. Yes, for a few, a very few, early retirement might become an economic option. But the president does not advocate raising taxes on the working class.

    The bottom line on the tax/spending debate is that taxes must be raised at some point or the government defaults on its commitments. There’s not enough wasteful spending in the non-defense discretionary spending fraction of our annual budgets to make more than a tiny dent in the debt that’s been accumulating ever since Reagan-era tax cuts of the early 80′s.

  21. Scott, I do not recall saying that the United States has been economically successful only because of the defense/industrial complex. However, it most certainly did help to decrease unemployment rates during the Reagan and Bush (G.W.) administrations. The U.S. imports relatively few weapons made in foreign countries. This is why Congress continues to fund G.E. for a second source of engines for the newest fighter plane — jobs, jobs, jobs.

  22. I mean i completely understand that defaulting on its commitments not to mention our debt. however i dont think its fair to saddle the average taxpayer with more out of my paycheck to support these programs like social security that washington has been borrowing against for years. not to mention a ridiculous bailout of corporations in 2008. i believe these entitlement programs have bankrupted this nation as well as spending for a war thats never coming. i just dont see how taxing and spending is the answer.

    Ya know i get the whole safety net thing i myself had to use these services for a few months when i was 22 but there is a vast amount of people who abuse this to the day they die. the whole system is corrupt with large beauracracies overseeing smaller ones and to continue to fund these ridiculous excuses for responsible government with more of my money or anyone elses is a bad joke. do we need these giant domestic spending programs that take 87cents of every dollar? i think not.

    I just dont think our founders had it in mind to support every last person that is born in america. and the left seems to want to move the u.s. to a socialist system like europe. my point is if we wanted the government telling us what to do then we wouldnt have revolted against england lol. okay long response sorry im enjoying talkting to you though.

  23. No, it would not be fair to saddle average taxpayers with higher taxes, neither would it be wise, not with the economy in the shape it’s in now. The Obama administration has not proposed doing this. He only wants only the richest of Americans to once again start paying a larger share. They can afford to pay higher taxes. He’s also pushing for the elimination of tax loop holes that only the wealthiest of Americans can use. Please understand, Scott, we are now buried in debt not because of actions of this president, but because Republicans in the past cut taxes but failed to hold the line on spending. The bailouts that seem so unfair to us were necessary to avoid default and save millions of jobs. Much of this money has been paid back now, with interest.

    The Founders, Scott, had no idea what the nation they formed would be like 230-plus years after the Constitution was ratified. Besides, neither you nor I would want to go back to the way things were then. Ninety percent of Americans were farmers and life expectancy was something like 45 years for whites — 20 to 25 for slaves. Health care was a joke and people, most people, really really needed their guns.

    At some point, you will retire, Scott, if you live long enough. At that point, unless you’ve been saving like crazy, you’ll be glad for Social Security and Medicare. You’ve been paying into these your whole life if you haven’t been self-employed. So you are entitled to receive benefits. So, if it means that the wealthy will have to belly-up closer to the bar, so be it.

  24. I just do not see how expecting people that have made a lot of money inherited it or whatever and pay what is it 50-60% of all taxes are required to give more just because they can. that is ridiculous. thats like saying because i have 60 TV channels i should give 30 to my neighbor because he cant afford it. I earned those channels. Maybe you liberals just like giving away other peoples TV channels theyve worked to have. Who decides how many Channels (money) is enough?

  25. With that said heres my conclusion. Sometime over the last 20yrs all the adults in this country decided to spend money they didnt have raid bank accounts that werent theirs and then say “hey we are gonna retire we earned it” The baby boomers the woodstock generation you guys are the problem. Democrats and Republicans you guys dont care you spend money on things that dont work and expect me and my kid to foot the bill. this isnt about liberal or conservative its about grownups acting like spoiled brats.

  26. In the end it doesnt really matter who was in charge. Everyone took something that worked and screwed it up. Why? Because noone over the age of 40 cares. You all failed. You bankrupted our finances and you try to do it socially. Its a bad joke. Maybe we should start selling our natural resource reserves. Thats what Rome did…we all saw what happened there. Or I know lets get everyone addicted to government so one group can stay in power indefinitely Russia did.those guys 230 yrs ago id put my money on them

  27. Think of it this way… at 135 pounds ringing wet, you’re part of an Infantry Rifle Plattoon in Afghanistan. The platoon sergeant has you carrying the M60 heavy machine gun even though two guys in your outfit are over 190 and look like Arnold Schwarzenegger. Either one of them could carry that weapon without even breaking a sweat, and you happen to know that they both qualified expert with it. Where’s the fairness in that?

  28. Well that proves my point. Life is not fair. in the military you have to do what your told. If you dont like it thats too bad. Thats why a civilian is in charge of the military so they don’t take over and tell us what to do. To me it sounds you are willing to give up your right to make your own decisions because YOU dont want to carry the gun. In this case. personal responsibility for your own financial future.

  29. I joined the army. I am responsible for the duties assigned. To suggest that my Sergeant bestowed a near impossible task to me is absurd. The fairness in that; is that the 2 muscle machines obviously worked hard for their bodies, and are superior soldiers and ‘qualified’. They are probably in charge of skinny man who is an inferior soldier. He could carry the gun for him, but would be putting his fellow troops at a disadvantage.

  30. Regarding to provision of economic justice in a society,is the Liberalism or Conservatism is better,and tell me why it is better then the other one.???

  31. From what I have observed, the majority in a society fare better under more liberal economic and social policies. The current crop of conservative politicians in Washinton D.C., USA advocate more freedom for corporations from regulations that are intended to protect consumers and favorable tax policies for the corporations and the wealthy. These policies leave consumers and the environment vulnerable to abuse and shift the tax burden more onto the middle class and reduce revenues. Revenues pay for government programs that provide needed services and infrastructure investments.

  32. HMMM I am a conservative small government democrat. yes I said all that and it is true, as for trickle down economics it had its place a stop gap measure, (That is all it was meant to be.)problem; no one finished the show. taxing the rich only makes them hold onto their money more. ie moving it out of the country. A complete revamping of the tax code ie burn it and start over, a modified flat tax accros the board would be a better avenue.
    As for race being an issue, I say poppycock. for the logical people race is never an issue. placing it in an article that was supposed to be about economics and the liberal vs conservative views was out of bounds.
    Now, it is a proven fact that the government uses multiple avenues to get to the same end. there are no less than 80 programs for the so called poor. (I say so called because compared to other countries our poor are rich. cell phones more than one car and cable tv and computers are abundant in their homes. not all but a huge chunck.) (approx.80% of which are duplicate.) sucking money from the budget to accomplish the same thing.Pare away some of the fat and pork and make the over 50% of individuals and companies that pay little to no taxes, actually pay something and then we are talking surplus.

  33. You are certainly welcome to your opinion, Doug. I respect it but, of course, disagree.

    You say you are a Democrate. Interesting. So, how do you plan to vote this year, and why? Do you want to see more of the fiscal and regulatory policies that caused the Great Recession?


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