Sure, some individuals have managed to pull themselves out of even the most dire circumstances. I admire that as much as you do. Where I differ from conservatives is that instead of saying “look, it’s possible!” I wonder, “is it probable”? Any given kid growing up in the ghetto has a much lower probabiliy of achieving success later in life than the same kid in a middle or upper class family.
Anyway, I’m off-topic yet again, sorry.
There are 2 sorts of arguments floating in the background. They both relate to how the MPC (marginal propensity to consume) varies with income.
RE: Short-term stimulus, fighting recessions.
If you want to increase aggregate spending, you want to direct tax cuts at those with the highest MPC, that is those who will save the lowest share of the tax break. That means lower-income folk. (You also want the tax cut to occur during a recession, rather than after it, but that’s a different story).
RE: Boosting the household savings rate. To do that, you would direct tax cuts at those with the lowest MPC, those who will save the highest share of the tax break. That will typically imply a tax cut directed at the rich.
RE: Boosting the national savings rate. Well, if you assume that some share of the tax cut will be spent, it would be best to skip the tax cut altogether, and keep piling up those budget surpluses. When the federal government taxes more than it spends, it runs a budget surplus. That budget surplus adds to national savings, directly.
If certain members of the wealthy class (eg jshore 
)have wonderful entrepreneurial ideas, they can do what they’ve always done: borrow money to put their idea into action. By going through the capital markets, the idea also receives a useful vetting process. When the Feds run a surplus, they necessarily make more money available for investment.
The standard answer to the above is, “You can’t trust the Feds to run budget surpluses indefinitely.” Now the argument gets trickier, since we’ve moved into the realm of politics and are outside Economics 101.
Erm, wouldn’t that be a demand side incentive to gte whiplash and such? 
Good for Bush. I’ve made it no secret that I don’t support him, nor the Republican party in general.
Perhaps I missed how one gets EIC. Perhaps children are needed? That’s my guess. And if you can live off welfare and state assistence with little work, why work more just so you can get the EIC? Hardly incentive to me. But, whatever. Why work for money when we can vote it to ourselves.
There is a fundamental difference between the government supporting the public–meaning, of course, everyone, rich people included (since they are, after all, people)–through infrastructure and actively targeting an economic sector to aide them in living. I don’t doubt that the “progressive” tax structure aided some. But you make it sound like, from the citizen’s perspective, there is a choice in taxation. One doesn’t have to receive welfare just because times are hard, you won’t get fined or jailed for it. Do something wrong on your taxes and things get strange. I dunno, I’ve been thinking about taxation lately and I think, as has been the trend lately, I’ll start a new thread on it this weekend.
Again, from what I read it seemed you were posing that trickle up or trickle down achieved the same thing, so why not “trickle up” because the folks at the bottom need it more than the folks at the top. This is my beef.
He had the nerve to do that? To think…people who want the government out of business had the nerve to think they did something without big brother :rolleyes: You(figuratively) shove the government down our throats and then wonder why we aren’t thankful that our belly is full of God and Country? Hardy-har.
I don’t know if gushing is allowed in GD, so I’ll keep it short.
Kimstu that was the most informative single post I have read in months.
Three gold stars to flowbark. With the multiplier effect, you answered my unspoken question, “When is a dollar not a dollar?”
I assume that economic scholars have examined, tested and debated what the multiplier fraction should be. Are there any generally accepted conclusions?
Namely: “Is .8 a reasonable across the board value?”
“How does that value change across the economic spectrum? Are the dollars poor people spend more or less likely to stay in the country?”
arl: And if you can live off welfare and state assistence with little work, why work more just so you can get the EIC?
Because as a worker you not only get more money to live on (with a properly dovetailed system of welfare benefits and EITC supplements so that workers actually do get more than non-workers), you get the opportunity to advance to better jobs, earn yet more money, and eventually get out of poverty into prosperity. Sure, some people who are fundamentally lazy and without ambition will not prefer this option. But most poor people will.
*Hardly incentive to me. But, whatever. Why work for money when we can vote it to ourselves. *
I think you had better watch your step here, buster. It’s none of my concern whether you criticize the member of your own family whom you so charmingly refer to as “the welfare broad”; :rolleyes: for all I know, she may be a truly worthless person who deserves all the abuse you can throw at her. But the vast majority of the non-wealthy do work for money, and accept that as a basic responsibility. That isn’t altered just because they also believe that it makes sense for the government to provide some tax-funded benefits that are not only personally helpful to them but helpful to society as a whole in the long run. I’ve had just about enough of your trying to stigmatize this as “laziness” and “greed”.
*[jshore:]"…when the evidence is that the government had everything to do with it [Cheney’s prosperity during the Clinton administration]."
He had the nerve to do that? To think…people who want the government out of business had the nerve to think they did something without big brother You(figuratively) shove the government down our throats and then wonder why we aren’t thankful that our belly is full of God and Country? Hardy-har.*
:rolleyes: Allow me to summarize the defense of your and Cheney’s position in another little dialogue:
Anti-government libertarian type: And I’ll have you know that I succeeded on my own merits, without asking Uncle Sam for handouts! See, that proves that government incentives are intrusive and unnecessary, and we should wipe out the whole system!
Liberal type: Actually, Uncle Sam’s “handouts” almost certainly contributed significantly to your success. You were definitely benefited by (a progressive tax system, a government contract, whatever).
AGLT:** Um…but I didn’t ask for this system to be set up! I didn’t want any government assistance! I could have made it all on my own, and in fact I could’ve done better! I could’ve could’ve could’ve! See, that proves that government incentives are intrusive and unnecessary, and we should wipe out the whole system!
So when you don’t benefit from tax-funded government assistance, it’s a sign of the futility and perniciousness of the system, and when you do benefit from it, that’s also a sign of the futility and perniciousness of the system. I see. I think jshore’s right, arl: this is not a political position, this is a religious belief.
ARL:
You know this is beginning to look like the thread where Spiritus and I had to whack some sense into your noggin. Clearly it didn’t work. Listen, you’re a clear-headed fellow. We’ve seen that in other threads. But clearly you can’t argue economics for shit. Part of the problem is you make arguments which are absurd. Reductio ad absurdem is only useful in contrast.
Putting this another way, your extreme restatements of both libertarianism as you understand it and other options are not bringing clarity. Rather you are (a) distorting your own points (b) setting up straw man arguments from others. I believe Spiritus explained to you the problems of your analytical method in this area. You would do well to review his comments and reflect on them, that way you might actually win some points.
Second, you desperately need to reread some economics. I think your either/or thinking has led you to some rather distorted understandings. In that connection, what are you talking about when you say the Gold Standard is a more “honest” monetary system. It strikes me you are once more falling into the error of confusing economic principals with morality and vice- versa.
Well, I think that the point has been made that, IF we are agreed to manipulate the economy, AND we are agreed that the tax dollars aren’t anyone’s after taken (ie-we spend 'em where we want and they remain public), AND that the supply side of the country has enough incentive, THEN it would be reasonable to have a “trickle up” tax break to the eoncomically impoverished. Including me.
Where I disagree with those policies are clear, I thought… As far as the rest of it goes, I have misrepresented other people enough to take kimstu’s last bout with a grain of salt (and a glass of alcohol). No further comment is necessary as a continuing hijack.
(1) To my understanding there is no consensus on the multiplier as (a) it is likely to change over time (b) and place. (I read this quickly so whack me if I misunderstood the reference)
(2) I’m more than a bit disappointed with this rhetoric about “dollars inside the country” and Kimstu’s neo-capital controls implications re investor investing abroad. Really folks, International Trade is not evil. Fraid I have a road trip tomorrow to do a site inspection but I think we need to examine some assumptions here. While ARL’s economics are quite whack, I don’t see it all necessary to adopt neo-isolationism (albeit non-explicit and perhaps unconscious.).
Actually, arl, I think that is the whole principle behind the rich’s support of elimination of the estate tax and large income taxes for themselves. They can do one better though…Not only can they vote for it, they can make a financial “investment” in the right candidates and then they get a handsome return on the investment! (That cite I posted previously to Billionaires for Bush or Gore has some examples of what sort of returns one can get!)
No, I agree it is not evil, but it is not without its problems…One of which is, that in the absence of strict environmental and labor standards, there can be a tendency for capital to go and seek out the cheapest labor (and the lowest amount of environmental regulation, etc.) it can find. And, with the argument floating around that rich people will invest the money returned from Uncle Sam and thus create jobs, it is reasonable to ask how many of those jobs will go to American workers. Otherwise, “trickle down” can become “trickle out”, at least as far as our nation’s economy is concerned.
Whoops…make that “large income tax breaks”!
You need to file your taxes. Too bad if you’re a tax resistor.
No. According to my 1040 instructions, (p. 40) you need to earn less than $10,380 if you don’t have a kid, and $31,152 if you do.
The government is our friend…
Those of with lower incomes benefit more from federal and state educational subsidies than the rich do. Those who have parents living on social security benefit from not feeling obliged to support them in their old age.
During the bad old days (1990) the Federal government spent about $20 billion on Aid to Families with Dependent Children, the welfare program that was criticized most. That represented less than 2% of total outlays. Of course, there was also food stamps, medicaid and the like.
Aw, shucks. 
No, .8 is used because the math is easier. The actual multiplier is much lower, since to calculate the amount “not spent domestically” means subtracting out taxes and import expenditures. My understanding is that the resulting multiplier turns out to be somewhat less than 2, (rather than 5).
Good questions. I don’t know the answer: it’s not in my textbook.
I don’t have the time to argue this since another race idiocy has broken out, but I will note the following:
(a) seeking out the cheapest labor of course is economically rational. What else do you expect? Cheap, however, will be in the context of total productivity.
(b) I don’t know that seeking out lowest environ. reg. is really supported by the research, but leaving this aside, the question of benefit to local populations outwieghts in my mind insofar poverty does much more damage to the environment in the Third World than development.
It seems to be that the above objections are not much more than protectionism dressed up in new language.
Again, while I am not a trickle down supporter, the suppostion above is that foreign investment may not benefit Americans generally. I don’t think this should be asserted as a blanket assumption.
Well, to be honest, if you want to describe protectionism as anything other than allowing a sort of “libertarian” market philosophy on the world scale, then perhaps you would classify me as protectionist. However, I personally would put myself someone in the middle, and maybe closer than the free trade side than the protectionist side.
I agree that foreign investment can have lots of second-order benefits. E.g., the goods produced can be bought by American consumers, the money that the workers in these other countries make can be used to buy American products, … But, my point is that the sort of direct effects of “we give rich people more money, they invest it to create jobs” doesn’t really pan out for our own economy in that direct sense if the jobs created are not here.
The question we are arguing here is a pretty narrow one of which sort of distribution of tax cuts has the greatest effect on our economy and one of the arguments for why giving tax breaks for those that will invest the money may not result in as great a benefit as one would predict is if they invest the money in ways that will not have as direct effect on our own economy. That’s all we’re saying.