Supply-Side Economics

[whell]

Originally Posted by donquixote99

Yes he did. Net effect was lower taxes on the rich, paid for by the middle class and the working poor, who's FICA and Medicaid taxes increased sharply.

Uh, no.

http://www.politifact.com/virginia/s...-taxes-during/

Increases on Social Security and Medicare were largely on higher wage earners. However:

Some of the increases were modest in scope. And it’s important to note that overall U.S. taxes, when measured as a portion of the nation’s GDP, went down during Reagan’s presidency.

[whell]

Originally Posted by finnbow

Not only that, Whell conveniently fails to mention that Reagan also significantly raised taxes after deficits ballooned following his tax cut:

After Reagan's first year in office, the annual deficit was 2.6% of gross domestic product. But it hit a high of 6% in 1983, stayed in the 5% range for the next three years, and fell to 3.1% by 1988...

So, despite his public opposition to higher taxes, Reagan ended up signing off on several measures intended to raise more revenue.

"Reagan was certainly a tax cutter legislatively, emotionally and ideologically. But for a variety of political reasons, it was hard for him to ignore the cost of his tax cuts," said tax historian Joseph Thorndike.

Two bills passed in 1982 and 1984 together "constituted the biggest tax increase ever enacted during peacetime."

http://money.cnn.com/2010/09/08/news...axes/index.htm

Uh, no.


Top rate on regular income when Reagan took office was over 69%. When he left, it was 28%. Capital gains - you know, that tax that the rich guys pay - went from 23.7% in 1980 to 28% when he left.

[finnbow]

Originally Posted by whell

Uh, no.


Top rate on regular income when Reagan took office was over 69%. When he left, it was 28%. Capital gains - you know, that tax that the rich guys pay - went from 23.7% in 1980 to 28% when he left.

Read and learn, Grasshopper.

The Economic Recovery Act of 1981, also known as the Reagan tax cuts, was the biggest reduction in U.S. taxes of the past 70 years, possibly even the biggest ever. That much is reasonably well-known.

What is less well-known is that these cuts were then followed by a series of tax increases that, if you add them all together, were almost as big as or even bigger than the 1981 cuts, depending on the measure you use.

https://www.bloomberg.com/view/artic...s-of-1982-1993

According to a 2003 Treasury study, the tax cuts in the Economic Recovery Tax Act of 1981 resulted in a significant decline in revenue relative to a baseline without the cuts, approximately $111 billion (in 1992 dollars) on average during the first four years after implementation or nearly 3% GDP annually.

During Reagan's presidency, the national debt grew from $997 billion in FY1981 to $2.85 trillion in FY1989. This led to the U.S. moving from the world's largest international creditor to the world's largest debtor nation. Reagan described the new debt as the "greatest disappointment" of his presidency.

https://en.wikipedia.org/wiki/Reagan...t_expenditures

The bottom line is that supply-side economics has never once delivered what conservatives have promised - that tax cuts pay for themselves and that tax cuts for the wealthy equally benefit the poor. There's no question that tax cuts and/or spending (both are considered tax expenditures by economists, BTW) can stimulate the economy. However, there's also no question that they add to the deficit when financed with debt. Republicans have sold gullible ideologues (i.e., people like you) the notion that that you can simultaneously reduce taxes and pay for additional spending by revenue generated by tax cuts. It's sophistry, plain and simple regardless of how appealing the idea of a free lunch is.

[Chicks]

Careful bandying all those facts about. You’ll confuse old Whell.

[Rajoo]

Today's budget calls for the same. Tax cuts done deal. Raise military spending for a war that will never be fought. And of course, cuts to safety nets. History shall repeat itself. Go for broke, cry poverty and then cut spending for the poor and the elderly.

Simply cannot understand why people vote Republican on the promise of small government (not), balanced budget (never). Never ever happens.

[whell]

Now, in actuality, what you have is Trump trying to do what Reagan couldn't.

https://www.politico.com/story/2018/...rograms-403636

The budget again reflects Trump’s businessman-like commitment to shrinking the federal bureaucracy, for the first time making public the White House’s plans for trimming staff and operations across the federal government.

Those “workforce reduction” plans — which rely on hiring freezes, buyouts and stripping protections that make it easier to fire workers — are the result of nearly a year of back-and-forth between OMB and agencies. Some departments, like Education, have already starting giving workers incentives to leave, while the Agriculture Department has made clear it will only be reorganizing, not cutting employees.

Also this:

To help pay for it, Trump’s budget office has requested scraping more from other social programs, like food stamps, and proposing changes to Medicare.

The federal health program is one of the fastest-growing drivers of the national debt. To help stem that rise, Trump’s budget proposes a slew of vague reforms including improvements to “drug pricing and payment policies” and “government-imposed provider burdens.”

Last year, Medicare was mentioned just 10 times in Trump’s budget. This year, the program is mentioned more than 100 times.

I think this is the right approach. Entitlement programs - along with most every other area of the gov't budget - grows every year. Does it make sense to think that we'll still need the same level of fund for these programs in the face of low unemployment and rising wages? I think not.

Of course, even suggesting this will make the left scream like stuck pigs.

[finnbow]

Originally Posted by whell

Now, in actuality, what you have is Trump trying to do what Reagan couldn't.

He's doing exactly what Reagan did - radically increasing the national debt. In Trump's case, the deficit will be ~$1 trillion a year over the next decade. At least Reagan did it during tough economic times (the right time for deficit spending, BTW). OTOH, Trump chose to do huge tax cuts and increased spending during strong economic times - the exact wrong time to do it.

BTW, in case you're wondering, Trump's budget proposal is going nowhere and is largely a meaningless document based upon ridiculous assumptions. You sure are easily misled by a con-man and discredited (and an internally contradictory/impossible) GOP economic policy.

Unfortunately, like last year, the budget relies on some extremely rosy economic assumptions and budget gimmicks that inflate its savings and distract from its actual policy reforms. The budget assumes real GDP growth will average around 2.9 percent over the next decade, including a short-term acceleration to as high as 3.2 percent in the next few years. This is much higher than other mainstream economic forecasts project and strains credulity, especially if interest rates and inflation also remain under control, as the budget predicts they will.

The budget also retains a number of policies from last year that are unlikely to generate the substantial savings it claims they would, such as $151 billion from reducing improper payments and $48 billion from testing return-to-work strategies for Disability Insurance beneficiaries.

Furthermore, the budget calls for an unrealistic 40 percent reduction in non-defense discretionary spending by 2028 – despite a lack of specificity as to where much of the funds will come from and despite the fact that the recent Bipartisan Budget Act of 2018 called for an increase in non-defense discretionary spending of over 10 percent.

http://www.crfb.org/blogs/overview-p...fy-2019-budget

[whell]

Originally Posted by finnbow

He's doing exactly what Reagan did - radically increasing the national debt. In Trump's case, the deficit will be ~$1 trillion a year over the next decade.

That's assuming low economic growth, no spending controls and a tax base that doesn't get wider. That's not what's happening, though.

Just like your dire assessment last week that Trump's tax cut caused a "1000 point drop in the Dow" (the Dow has erased 1/2 of those losses in the last two days and will continue its upward trend because the long term outlook for continued growth is positive), you're demonstrating your understanding of the economy is limited to Dem talking points.

[finnbow]

Originally Posted by whell

That's assuming low economic growth, no spending controls and a tax base that doesn't get wider. That's not what's happening, though.

WASHINGTON (Reuters) - As the U.S. Congress limps toward the likely passage next week of another stopgap spending bill to avert a government shutdown, a Washington think tank has estimated the federal budget deficit is on track to blow through $1 trillion in 2019.

If it does, it would be the first time since 2012 the U.S. economy will have to support a deficit so large, highlighting a basic shift for the Republican Party, which has traditionally prided itself on fiscal conservatism.

The Committee for a Responsible Federal Budget, a Washington fiscal watchdog, said the red ink may rise in fiscal 2019 to $1.12 trillion. If current policies continue, it said, the deficit could top a record-setting $2 trillion by 2027.

https://www.reuters.com/article/us-u...-idUSKBN1FI2P2

These aren't Dem talking points, dimwit. Trump's own Treasury Dept just announced that it will need to borrow $3 trillion in the next 3 years.

https://www.cnbc.com/2018/02/05/trea...re-beyond.html

I guess you simply like being lied to by supply-siders who have never once been proven right.

[whell]

Originally Posted by finnbow

WASHINGTON (Reuters) - As the U.S. Congress limps toward the likely passage next week of another stopgap spending bill to avert a government shutdown, a Washington think tank has estimated the federal budget deficit is on track to blow through $1 trillion in 2019.

If it does, it would be the first time since 2012 the U.S. economy will have to support a deficit so large, highlighting a basic shift for the Republican Party, which has traditionally prided itself on fiscal conservatism.

The Committee for a Responsible Federal Budget, a Washington fiscal watchdog, said the red ink may rise in fiscal 2019 to $1.12 trillion. If current policies continue, it said, the deficit could top a record-setting $2 trillion by 2027.

https://www.reuters.com/article/us-u...-idUSKBN1FI2P2

These aren't Dem talking points, dimwit. Trump's own Treasury Dept just announced that it will need to borrow $3 trillion in the next 3 years.

https://www.cnbc.com/2018/02/05/trea...re-beyond.html

I guess you simply like being lied to by supply-siders who have never once been proven right.

Really? The Treasury increased its borrowing - according to the CBO anyway - because projections for tax revenue are down due to the tax cut. Does anyone really think that tax revenue will be lower in 2018 than it was in 2017? Really?

Your CRFB post about the budget suggested that Trump's budget projected a 2.9% GDP growth and that projection was "rosy" and "strained credulity" because other "mainstream" organizations projections were much lower. LOL!! As I recently posted, the Conference Board was projecting 2.9%, and they're pretty damn mainstream. Even the New York Fed recently bumped up their projection to 2.75% recently. Is that "much lower" than 2.9%? I also suspect they'll bump it up some more later this year.

You can believe whatever you want, Finn. You have a gift for ignoring strong evidence to the contrary.