How does deregulation mean more economic freedom for everyone?

[russ_watters]

To Russ's point, the reason I picked 1980 or there about is because that is about the time when the stagnation begun.

I find it difficult to call a 4% drop followed by a 14% rise followed by an 8% drop followed by an 18% rise followed by a 13% drop "stagnation".

The reason it looks like stagnation when you pick the two end points (a 0.3% rise) is that you happened to pick a point near the peak of one cycle followed by one near the bottom of the deepest recession we've had since the depression. There is every reason to believe - from the history of the last several cycles - that incomes for the bottom quintile are going to see a 20% rise over the next 5-10 years.

 

[Mentalist]

No, the numbers are inflation adjusted. Please source the claim that they work more hours.
On that we agree.

http://www.huffingtonpost.com/2011/10/11/employees-longer-hours_n_1005111.html

My suggestion is always to increase taxes and spend a bit less than the money bringing in in these times.

 

[Jim Kata]

2006 in 2011 dollars

12,663; 32,101; 53,793; 85,145; 187,594; 331,756

1980 in 2011 dollars

11,201; 27,877; 46,000; 67,770; 120,834; 180,571

Increase in real income

13% ; 15%; 17%; 26%; 55%; 84%

Do you see a trend?

 

[Jim Kata]

I find it difficult to call a 4% drop followed by a 14% rise followed by an 8% drop followed by an 18% rise followed by a 13% drop "stagnation".

The reason it looks like stagnation when you pick the two end points (a 0.3% rise) is that you happened to pick a point near the peak of one cycle followed by one near the bottom of the deepest recession we've had since the depression. There is every reason to believe - from the history of the last several cycles - that incomes for the bottom quintile are going to see a 20% rise over the next 5-10 years.

Real wages haven't raised by 20% for the bottom quintile in the last thirty years why would we think they'd raise by 20% in the next 5-10?

 

[mheslep]

*People* can and do move out of statistical quintiles over time, even if the pay defining the bracket is stagnant.

 

[Jim Kata]

The Tax Foundation reviewed Romney's tax plan in response to the TPC review, taking issue with the TPC assumption that taxes rates have no impact on economic growth.


http://taxfoundation.org/article/simulating-economic-effects-romneys-tax-plan





U. Chicago economist John Cochrane reviews the Tax Foundation study here.

http://thinkprogress.org/economy/2012/10/16/1020461/reagan-advisor-taxes-job-growth/?mobile=nc

Are they willing to stake their careers on these claims?

 

[mheslep]

http://thinkprogress.org/economy/2012/10/16/1020461/reagan-advisor-taxes-job-growth/?mobile=nc

Are they willing to stake their careers on these claims?

They being the Tax Foundation people and, e.g. Cochrane? Is that a standard to demand of every economist and politician, or just these?

 

[Jim Kata]

They being the Tax Foundation people and, e.g. Cochrane? Is that a standard to demand of every economist and politician, or just these?

Explain to me how this is any different than supply side economics and trickle down economics? As Russ said the Bush tax cuts were for everyone, but seemed to only help one group of people. Both times these type of tax plans were tried they exploded the deficit.

Granted, Romney's tax plan does have loophole closures, but since the capital gains loophole is off the table and he wants a repeal of the estate tax most experts agree the numbers don't add up unless he closes some loopholes for the middle class. The only two loopholes left big enough to make up this revenue is the charitable givings deduction and the mortgage deduction.

The argument that these tax plans are dynamic and are going to create millions of jobs and that this will fix the revenue shortfall problem does not seem to of borne out when Reagan and Bush tried similar plans. This to me seems like supply side and trickle down in different clothing how is it not?

 

[Bacle2]

*People* can and do move out of statistical quintiles over time, even if the pay defining the bracket is stagnant.

Still, according to this:

http://www.sciencedaily.com/releases/2012/09/120905141920.htm

the odds of that happening are not good, i.e., the probability of moving up from

your quintile --which one may take to be the definition of upward mobility--is low.Many others seem to agree:

http://www.cuil.pt/r.php?cx=0046045...=UTF-8&q=upward+mobility+in+the+U.S&sa=Search

Still, it is difficult to understand why mobility is low.

 

[Vlodko]

Percent increases over from 1967 till 2011 for the adjusted to todays dollar data.

Source: http://www.census.gov/hhes/www/income/data/historical/household/2011/H03AR_2011.xls
(the 2nd set of data)

Lowest 119%
2nd 112%
3rd 120%
4th 137%
5th 170%
top 5 188%

Was this how trickle down was supposed to work?

I think it's pretty bad over a 30 year time span... but even worse over a 50 year time span. The data used in this table was normalized up through 2010 dollars.

https://www.facebook.com/photo.php?pid=13716948&id=502061487&op=1&view=all&subj=439568362762774&aid=-1&oid=439568362762774

 

[mheslep]

As Russ said the Bush tax cuts were for everyone, but seemed to only help one group of people.

What do you mean it seemed to be for one group? That it makes a good story?
http://en.wikipedia.org/wiki/Jobs_and_Growth_Tax_Relief_Reconciliation_Act_of_2003#Single

 

[mheslep]

Both times these type of tax plans were tried they exploded the deficit.

You mean with the 80's and 2003 tax cuts? Please show where revenue loss occurred that caused large deficits?

most experts agree the numbers don't add up unless he closes some loopholes for the middle class.

Which 'experts'? How are they 'most'? Have you read these experts?

 

[mheslep]

Still, according to this:

http://www.sciencedaily.com/releases/2012/09/120905141920.htm

the odds of that happening are not good, i.e., the probability of moving up from

your quintile --which one may take to be the definition of upward mobility--is low.

There seems to be some debate about the subject. No data in that link. Here's some

Of individuals who were in the lowest income quintile in 1975, 5.1 percent were
still there in 1991, 14.6 percent had moved up to the second quintile, 21 percent
to the middle quintile, 30.3 percent to the fourth quintile and 29 percent to the
highest quintile. Of those in the highest quintile in 1975, 62.5 percent were still
there in 1991, while 0.9 percent had fallen all the way to the bottom fifth.

https://www.physicsforums.com/showthread.php?p=3590658&highlight=mobility#post3590658

 

[Vlodko]

I don't think it matter who is in a given Income group at a given point in time, we are just measuring the aggregate Dollar Amounts in those groups. Here is a consise summation of the Important Income Groups and Catagories and how they Shrunk or Grew over time and and over Specific Time Frames...
http://i1288.photobucket.com/albums/b497/vlodko/AverageAnnualIncomeAnalysisfrom1920throught2010_zpse0a96e18.jpg

 

[Bacle2]

I don't know if you want some data tables, but there is some data in the study itself (tho, as you said, not in the link I gave you):

http://www.psc.isr.umich.edu/pubs/pdf/rr12-766.pdf

I found some in pages 24, 28,30, and at the end of the study.

I agree it is arrogant for the author of a study to claim that the study _shows_ something to be the case. If this were so, we would be in trouble, given that different studies reach different, often contradictory conclusions.

I wonder if we should also consider the fact that around 15% of people who immigrate to the U.S return to their respective original countries*. I believe nowadays most immigrants are economic immigrants **; if this is so, then it would seem reasonable to believe that a good chunk of those returning were not able to move up on the ladder (maybe others could not handle the change in cultures).

*The World Book Encyclopedia, Volume 10, Page 82

** World Almanac and Book of Facts, p.620; more than 95% of foreign-borns come from 3rdworld countries.

 

[Jim Kata]

First off mheslep, you never answered my question on how the Romney tax plan was any different than Supply Side economics or Trickle Down economics. The cutting of marginal tax rates and increasing deregulation are the tenets of supply side and trickle down economics and neither of those worked so what makes you think this will?

Let's take a quick look at the history of the Tax Foundation since these are the experts you have cited. The Tax Foundation was founded by the chairman of General Motors, the president of Standard Oil (Exxon) and some other high ranking ceos. Since 1990 the Tax Foundation has operated as a separate unit of Citizen's for a Sound Economy. Citizen's for a Sound Economy was a conservative political group founded by David Koch and Charles Koch. In 2004 Citizens for a Sound Economy split into Freedom Works whose chairman is Dick Army and everyone's favorite political advocacy group Americans for Prosperity. So forgive me if I am a little incredulous of this economic think tanks claims because even if they are non partisan the source of their funding is definitely agenda driven. I trust their opinion's on the economy about as much as I trust Koch brother's think tanks opinions on climate change. To me these are not objective sources but just toadies for Koch industries agendas.

To the question of revenues, the Bush tax cuts claimed that they would be revenue neutral through the idea of the Laffer curve, but let's look at the evidence.

http://upload.wikimedia.org/wikipedia/en/9/90/Revenue_and_Expense_to_GDP_Chart_1993_-_2008.png

To the sources that say Mitt Romney's tax plan's don't add up most sources agree on this so just pick one.

Use common sense. If you give a 20% tax cut across the board and increase military spending by 2 trillion dollars that puts you something like 7 trillion dollars in the hole. Do you think you can dig out of a 7 trillion dollar hole with increased economic activity and the closing of a few loopholes? If you do, just look at the Bush tax cuts of the last decade and notice that they added 1.7 trillion dollars to the national debt, and the tax cuts Romney are proposing are even more drastic than them. Insanity: doing the same thing over and over again and expecting different results. -Albert Einstein.

 

[Jim Kata]

You mean with the 80's and 2003 tax cuts? Please show where revenue loss occurred that caused large deficits?

 

[russ_watters]

I'm not sure why you posted the graph in post #52 (but I'd been missing that one!) since it doesn't address the question asked in the quote, but the one you posted in post #51 shows that tax revenue under Reagan, as a % of GDP, was flat despite cuts in taxes. It also shows that the biggest contributor to the debt under Obama was a large increase in spending as a fraction of GDP -- like none seen in the past 30 years. In the previous two recessions, there was no similar increase in spending -- though Bush did increase spending a little due to his wars and creation of the Homeland Security Dept, that was nothing compared to what happened under Obama.

Bush's term unfortunately included a very short economic growth period (4 years) due to the long-simmering housing bubble, but you can see from the spending and income graph you posted that another year or two of growth would have had us back in the black. By comparison, During Clinton's term it took 5 years for growth to result in a balanced budget (starting with a year or two left in Bush I's term). So the two trajectories are pretty comparable to each other.

 

[mheslep]

http://xoutsocialism.files.wordpress.com/2011/02/debtchart.jpg[/QUOTE]

JK, you stated before that "tax plans" ... "exploded the deficit." Taxes provide the revenue side of the deficit. If revenue increases, but spending explodes then it is hardly the fault of the tax plan that the deficit increases. So, here is federal revenue over time (constant dollars).

2000-2012. Bush tax cuts went into effect starting in 2001, fully in 2003:

1980-1990. Kemp-Roth tax cuts were 1981; 2nd tax cut was 1986.

 

[mheslep]

First off mheslep, you never answered my question on how the Romney tax plan was any different than Supply Side economics or Trickle Down economics. The cutting of marginal tax rates and increasing deregulation are the tenets of supply side and trickle down economics and neither of those worked so what makes you think this will?

Let's take a quick look at the history of the Tax Foundation since these are the experts you have cited. The Tax Foundation was founded by the chairman of General Motors, ...

Yes in 1937, and irrelevant. Here are the bios of the http://taxfoundation.org/staff/stephen-entin

... So forgive me if I am a little incredulous of this economic think tanks claims because even if they are non partisan the source of their funding is definitely agenda driven. ...

Which is to say, what, i) you read the report and are incredulous, or ii) you declined to read it because of perceived bias and are uninformed about its contents?

To the question of revenues, the Bush tax cuts claimed that they would be revenue neutral through the idea of the Laffer curve, but let's look at the evidence.

I think the straight revenue figures are more to the point as opposed to revenue/GDP , but either way, what happened? Where does revenue from tax policy change explode the deficit?

[...]

To the sources that say Mitt Romney's tax plan's don't add up most sources agree on this so just pick one.

That's the second time you've made the statement that "most sources" agree with your assertion that Mitt Romney's tax plan will run up the deficit, but without providing any sources despite a request.

If you give a 20% tax cut across the board and increase military spending by 2 trillion dollars that puts you something like 7 trillion dollars in the hole. Do you think you can dig out of a 7 trillion dollar hole with increased economic activity and the closing of a few loopholes?

That's a gross misstatement of the proposal (one proposal):

"What are the various ways we could bring down deductions, for instance? One way, for instance, would be to have a single number. Make up a number—$25,000, $50,000. Anybody can have deductions up to that amount. And then that number disappears for high-income people. That's one way one could do it."

A hard cap on *all* deductions is not closing a few loopholes.

With regards to military spending, I think it should be cut, actually cut, but have not seen anywhere where Romney favors a $2 trillion increase (over what, ten years?).

 

[Jim Kata]

Which is to say, what, i) you read the report and are incredulous, or ii) you declined to read it because of perceived bias and are uninformed about its contents?

I think the straight revenue figures are more to the point as opposed to revenue/GDP , but either way, what happened? Where does revenue from tax policy change explode the deficit?

[...]

That's the second time you've made the statement that "most sources" agree with your assertion that Mitt Romney's tax plan will run up the deficit, but without providing any sources despite a request.


That's a gross misstatement of the proposal (one proposal):



A hard cap on *all* deductions is not closing a few loopholes.

With regards to military spending, I think it should be cut, actually cut, but have not seen anywhere where Romney favors a $2 trillion increase (over what, ten years?).

Mheslep you still haven't explained how the Romney tax plan is different than Supply Side or Trickle Down economics.

I know you're trying to argue that Supply Side economics and Trickle Down economics had a very limited effect on the debt and the fact that the debt exploded both times these economic policies were tried is sheer coincidence due to reckless spending not a shortage of revenue. In the national debt 1.7 trillion of it is directly due to the bush tax cuts, 678 billion is due to other tax cuts, and 391 billion was due to the 2010 tax deal. That is a total of 2.77 trillion dollars that is directly due to tax cuts.

I read the Tax Foundation's proposal, and don't agree with their conclusions. Whenever deficits have gotten out of control in the past government has raised taxes to increase their revenue. This was done by both Reagan and Bush 41. In times of slow economic growth the government usually gets involved in the economy to spur growth. This leads to an increase in government spending. To offset this increased spending the typical response has been to raise revenues to keep the deficit in check as Bush 41 and Reagan both did. I am not an economics expert so I do not have the authority to judge the findings of the Tax Foundation, but when Paul Krugman an economist whose opinion I truly respect says "the Tax Foundation is not a reliable source" I take heed.

http://economistsview.typepad.com/economistsview/2008/08/the-greek-menac.html

As far as what sources claim Mitt Romney's tax plan is not deficit neutral, there are some listed in this New York Times article that are not the Tax Policy Center.

http://www.nytimes.com/2012/10/25/business/tax-policy-center-in-spotlight-for-its-white-paper.html?_r=0

Some of the experts who say they don't see the math working out come from far left wing fringe think tanks like the American Enterprise Institute.

Also everyone's favorite Ferris Bueller high school teacher economist Ben Stein lent his opinion on the subject on Fox news. "I hate to say this on Fox- and I hope I will be allowed to leave here alive- but I don't think there is anyway to cut spending enough to make a meaningful difference." "We are going to have to raise taxes on very rich people, people with incomes like say 2,3 million a year and up, and then slowly move it down." This man can't even figure out that evolution is real, but is smart enough to figure this one out.

Even though I know I'll never be able to establish the causality between Supply Side policies and the debt to your liking, I have anecdotal question for you? When was the last time there was a budget surplus? Was it under the economic policies of Reagan or either of the Bushes?

 

[Jim Kata]

one more interesting chart

 

[mheslep]

Mheslep you still haven't explained how the Romney tax plan is different than Supply Side or Trickle Down economics.

You stated earlier you were aware Romney's plan was an across the board rate cut (and deductions cap)? Isn't trickle down supposed to be about taxes breaks just for the 'rich'? Anyway, I'm not interested in arguing vague labels, even less about which labels do not apply.

I know you're trying to argue that Supply Side economics and Trickle Down economics had a very limited effect on the debt and the fact that the debt exploded both times these economic policies were tried is sheer coincidence due to reckless spending not a shortage of revenue.

I did not argue the revenue figures, they are what they are and I referenced them. Once there's agreement on the basic numbers, then a productive argument is possible.

In the national debt 1.7 trillion of it is directly due to the bush tax cuts, 678 billion is due to other tax cuts, and 391 billion was due to the 2010 tax deal. That is a total of 2.77 trillion dollars that is directly due to tax cuts...

More assertions made as fact, so I'll move on ...

 

[Jim Kata]

You stated earlier you were aware Romney's plan was an across the board rate cut (and deductions cap)? Isn't trickle down supposed to be about taxes breaks just for the 'rich'? Anyway, I'm not interested in arguing vague labels, even less about which labels do not apply.

The 2003 Bush tax cuts, trickle down, was for everyone. These are not just vague labels it's important for people to know what the Romney tax plan is really about. It's Supply Side and Trickle Down with a new name. The same ideas as before with a new name.

You said that it's not a fact that the Reagan and Bush tax plans added to the debt I'll post one more source and be done with it.

http://sphotos.xx.fbcdn.net/hphotos-ash4/306215_3671363777996_1091927144_33446125_1631130008_n.jpg

 

[Jim Kata]

One more time, to show how the tax plans have directly affected the debt.

That's, add it up, 2.77 trillion dollars due to tax cuts.

 

[RabbitWho]

They're just trying to appeal to the hyper-individualists. It has nothing to do with age or gender or intelligence or pretty pie charts. It rages from "hur-dur I don't want nobody telling me what to do, no government, nobody" to people who are intelligent but not so interested in politics to people who are well-read highly educated libertarians to people who are living in holes in the ground surrounded by 100 years worth of baked beans.

So even though it seems like deregulation isn't going to affect their freedom, it fits in with their life philosophy.

 

[mheslep]

One more time, to show how the tax plans have directly affected the debt.


That's, add it up, 2.77 trillion dollars due to tax cuts.

Debt is $16 trillion. Doesn't add up. BTW, what's the source for that graph?

 

[Jim Kata]

Debt is $16 trillion. Doesn't add up. BTW, what's the source for that graph?

I think it came from Time magazine, but it doesn't matter because I am done talking to you after this post. Since you question my sources here's a source you might understand

http://www.foxbusiness.com/on-air/stossel/sites/foxbusiness.com.on-air.stossel/files/images/Graph%201.preview.jpg

The vertical axis I think is debt to GDP ratio.

Here is another one

Here are some projections if the Bush tax cuts stay in place.

 

[RabbitWho]

I think I just need 3 more colorful charts to decide who I'm going to vote for... or who I would vote for if I was allowed

 

[Pythagorean]

I don't see how the concepts of either deregulation or regulation are very meaningful alone. There's good and bad versions of each. It's the implementation and integration of them that determine how they affect social values like freedom. Deregulation that gives corps political power is bad, regulations that give bureaucrats power are bad. They each have potential to take away freedoms from the public.

 

[OmCheeto]

I think I just need 3 more colorful charts to decide who I'm going to vote for... or who I would vote for if I was allowed

Do colorful graphs count? Here's an old one I put together 2 days before Halloween last year:

Let's see if anyone can remember what it represents.

hint: edward, george Carlin, and I, all seemed to be on the same page that day.

ps. Looking at the name of the image is cheating.

 

[russ_watters]

Well, the name is a vague but generally WRONG, but common claim.

So if I could guess how that wrong statement could be made to look right via manipulation, I'd guess we're looking at a graph of share of income received by select income brackets.

 

[OmCheeto]

Well, the name is a vague but generally WRONG, but common claim.

So if I could guess how that wrong statement could be made to look right via manipulation, I'd guess we're looking at a graph of share of income received by select income brackets.

Ha ha! Ellipses can come across as very disingenuous.

since1979thepoorest80percenthavebeenlosing

perhaps should have been called:

since1979thepoorest80percenthavebeenlosingthebattlefortheirshareofthepie

The original file has disappeared from the CBO. But being the pack rat that I am...

after-tax_income_shares.pdf

Even my text describing the graph was a bit erroneous

post tax income since 1979 until 2007
bottom 5 lines are quintiles
top 3 lines are 1%, 5%, & 10%
I'm sure you can identify which is which. (Who knows how to say; Cha-Ching!)

hmm... I must have been very emotional.

2 gaffes in one day? Inexcusable! Where were the PF mentors when I needed them?

------------------------------
not baby-sitting your ****-***... Om...

 

[enosis_]

Does economic freedom = deregulation?

The two may be related - doubtful they are equal.

 

[OmCheeto]

The Congressional Research Service has withdrawn an economic report that found no correlation between top tax rates and economic growth...

(ref)

What was our reason for not taxing the rich more?
So we could be that much more in debt?

hmmm...



Om: Mr. Peterffy, what are your opinions on taxing the rich.
http://www.businessweek.com/news/2012-10-16/billionaire-peterffy-says-1-dot-9-billion-taxes-support-poor: The rich support the poor primarily via taxes. I paid $1.9 billion in taxes in my lifetime.
Om: Bloomberg, how rich is Mr. Peterffy?
http://www.businessweek.com/news/2012-10-16/billionaire-peterffy-says-1-dot-9-billion-taxes-support-poor: He has an estimated net worth of $7.6 billion.
Om: NPR, how did he make his fortune?
NPR: He didn't want to type in the orders. He and his engineers hacked into the NASDAQ terminal and wired it up to their own computer, which traded automatically based on algorithms.
Om: Algorithmic trading? Sounds like the stuff of Quants.
Om: Quant, what do you think of these quants?
Quant: I think its fantastic, that people who take risks, should be compensated for taking risks. But only if they are taking risks themselves. Taking risks with other peoples money, you should not get compensated for. I'm sorry. ... Sadly though, it does in this business.
Om: Mr. Peterffy, do you think we need more regulations in the stock market?
TP: We are competing at milliseconds. And whether you can shave three milliseconds of an order, has absolutely no social value.
Om: No social value? hmmm... What are you personally doing about this?
TP: I am voting Republican.
Om: I see. OmCheeto, what is your take on Mr. Peterffy?
OmCheeto: Well, this is just my humble opinion, but I think Mr. Peterffy would be penniless if the stock market had been well regulated, rather than a virtual gambling casino for the wealthy.
Om: You sound like a conspiracy theorist. What makes you think Mr. Peterffy isn't sincere in his statement that "America is on a slippery slope, headed towards becoming a Socialist, failed state, like his homeland of Hungary"?
OmCheeto: Several reasons:

a. America has one of the lowest tax rates in the industrialized world. Ergo, we are far from being socialist.
b. Mr. Peterffy is a Wall Streeter. Wall Streeters don't want rules that impede their accumulation of wealth.
c. Other Wall Streeters use their financial power to try and influence elections, when it suits their financial interests.
d. If the Democrats had their way, as in, implementing a transaction fee on trading on the stock market, Mr. Peterffy would be broke.
e. Money is power
f. Power corrupts
g. Gob loads of money corrupts, a lot
h. Since I became an investor in the stock market, I haven't given 1/10 of what I used to, to charitable organizations. I now understand greed.​

Om: Wow. You are a whack job Mr. OmCheeto.
OmCheeto: I don't know what that means, so I'll take it as a compliment.



--------------------------------
ok to delete.