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Thread: Interest rates in the coming months

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    In Florida, DeSantis cut off the enhanced Unemployment benefit two months early. With a resultant drop in unemployment.
    Quote Originally Posted by eagle2 View Post
    Why are there 25 states with lower unemployment than Florida? Why are Florida restaurants on the Gulf Coast having trouble finding staff?
    Quote Originally Posted by Eric Stoner View Post
    The unemployment rate is a lagging indicator. Let's see where Florida ranks a few months from now.
    Florida has gone from having the 26th lowest unemployment rate to currently having the 28th lowest unemployment rate.

  2. #127
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    Default Re: Interest rates in the coming months

    Please stop with the patronizing.

    Reagan's tax cuts were PASSED into law in 1982. It took a while for them to take effect. Like in 1983 , 1984, 1985 etc.
    They were not an instantaneous magic bullet.

    Florida's unemployment rate is LOT lower than California's, New York's and New Jersey's.

    According to the latest numbers we have 11 million job openings and 8 million unemployed. How do you account for the discrepancy ? Are you saying there are no negative disincentives ?

    According to you , high tax rates promote economic growth ? Encourage start ups ? Hiring ? Business expansion ? Are you serious ?
    Last edited by Eric Stoner; 09-08-2021 at 10:40 AM.
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  3. #128
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Reagan's tax cuts were PASSED into law in 1982. It took a while for them to take effect. Like in 1983 , 1984, 1985 etc.
    They were not an instantaneous magic bullet.
    No. Reagan's tax cuts were passed into law in 1981 and went into effect in 1982. Starting January 1982, workers were having less money taken out of their paychecks for federal income taxes. Why would it take a year for these workers to increase spending on consumer products? Why were increases in consumer spending lower after George W Bush cut taxes, than the increases in the 1990s, when federal income taxes were at their highest level over the past 45 years? Why was economic growth stronger and unemployment lower in the 1990s, when taxes were higher, than in the 2000s, when taxes were lower?

    Quote Originally Posted by Eric Stoner View Post
    Florida's unemployment rate is LOT lower than California's, New York's and New Jersey's.
    The same was true before FL ended their extended unemployment payments. Massachusetts, Vermont, Minnesota, Virginia, Wisconsin, and Kansas all have lower unemployment rates than Florida, and none of these states ended extended unemployment payments. I think Massachusetts had a higher unemployment rate when Florida ended their extended unemployment payments, and now has a lower unemployment rate.

    Quote Originally Posted by Eric Stoner View Post
    According to the latest numbers we have 11 million job openings and 8 million unemployed. How do you account for the discrepancy ? Are you saying there are no negative disincentives ?
    The pandemic is a major factor. There are many people who aren't willing to risk their lives for a minimum wage job. That's why states like Massachusetts and Vermont have lower unemployment rates than Florida, even though they continued to extend unemployment benefits. There are even members of this forum who expressed reluctance to return to work because of the high rate of covid in their state.

    Quote Originally Posted by Eric Stoner View Post
    According to you , high tax rates promote economic growth ? Encourage start ups ? Hiring ? Business expansion ? Are you serious ?
    You greatly overestimate the impact that tax rates have on economic growth. There are many other factors that have a much bigger impact, especially demand in the economy. Consumer confidence, interest rates, and government spending all have a much bigger impact. Lower tax rates can reduce growth, if it results in higher interest rates. We had strong economic growth in the 1990s because the tax increases resulted in lower interest rates. This is not to say that lower taxes are always bad for the economy or higher taxes are always good for the economy, but tax rates don't have as big of an impact as you think they do, and lower tax rates aren't always good and higher tax rates aren't always bad, which seems to be what you think. I'm not saying this because I have a preference of one policy over the other. My views are based what happens in the real world, not the theoretical. Your views are based on the theoretical. If we consistently had stronger economic growth and lower unemployment when taxes were lower, and slower economic growth and higher unemployment when taxes were higher, then I would agree with you on taxes, but that's not the case. There have been many times when we saw the opposite happen. Businesses expand based on demand for their goods and services, not tax rates. No matter how much you reduce taxes on businesses, they're not going to expand, unless expanding will increase their current or future profits. That's why we didn't see any major business expansion after Trump cut corporate taxes.

    Startups are encouraged by whether or not there are better alternatives, and what the consequences of failure are. Sometimes a bad economy will do more to encourage startups. Most people aren't going to leave a secure, high-paying job to take the risk of starting their own business. If you're unemployed and have little job prospects, or you're stuck in a low-paying job with no other alternatives, you're more likely to take the risk of starting your own business. That is why even though the economy was bad during the 1970s, some of our most successful companies were started during those years.

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    Default Re: Interest rates in the coming months

    If you check your history , Reagan's tax cuts did NOT take effect all at once. They were phased in over TWO years; 1982 and 1983. Their full effect was not felt until 1983 , 1984 and 1985 as I posted. Part of the reason for the lag in spending was INTEREST RATES as I previously posted. As rates went down , spending went up. Before Reagan's cuts were passed we had double digit interest rates on mortgages and car loans. Consumer credit rates were even higher.

    There are a LOT of jobs out there that pay a LOT more than minimum wage. We have a major truck driver shortage ; a nursing shortage and shortages in several other areas providing good paying jobs.

    "Tax increases resulted in lower tax rates" ? And Bush's tax cuts caused the Financial Crisis , right?
    Then why did we have a boom under Coolidge ? After two tax cuts ? Under LBJ ? Under Clinton ?
    Why didn't Hoover's tax increases restore economic stability ? or FDR's ?
    Why did we have three recessions under Eisenhower ? Stagflation in the 70's ? Why did the deficit increase and recession deepen AFTER Bush Sr.'s tax increases ? Hardly "theoretical " examples. Just historical ones you prefer to completely ignore. Why have the Swiss historically had a sound, healthy economy ? Their tax rates have been consistently lower than those of their neighbors.

    Startups are created during all sorts of economic conditions. SUCCESSFUL startups that employ other people are more likely during periods when capital can be accumulated or borrowed at a reasonable interest rate and a fair share of profits can be retained.
    Last edited by Eric Stoner; 09-10-2021 at 07:26 AM.
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    If you check your history , Reagan's tax cuts did NOT take effect all at once. They were phased in over TWO years; 1982 and 1983. Their full effect was not felt until 1983 , 1984 and 1985 as I posted. Part of the reason for the lag in spending was INTEREST RATES as I previously posted. As rates went down , spending went up. Before Reagan's cuts were passed we had double digit interest rates on mortgages and car loans. Consumer credit rates were even higher.
    There were also tax increases passed in 1983 and 1984, but the avg. tax rate was about the same. In 1981, the avg. tax rate was 22.6%. After Reagan's tax cuts went into effect in 1982, the avg. tax rate was down to 20.8%. In 1983, it was 20.5%. In 1984 it was 20.8%, and in 1985, it was 20.9%.

    https://www.taxpolicycenter.org/stat...all-households

    Yes, consumer spending increased because interest rates went down, and so did the price of gas. Those were the main reasons why the economy improved during the 1980s. Not because of Reagan's tax cuts. There was little noticeable change in the economy when Reagan's tax cuts went into effect. It was only when the interest rates and price of gas fell, that the economy improved.

    Quote Originally Posted by Eric Stoner View Post
    There are a LOT of jobs out there that pay a LOT more than minimum wage. We have a major truck driver shortage ; a nursing shortage and shortages in several other areas providing good paying jobs.
    There was already a truck driver shortage when the pandemic started.

    https://www.trucking.org/sites/defau...th%20cover.pdf

    Many nurses left their profession because before there was a vaccine, they didn't want to risk their lives every day at work. There is also a high burnout rate from being overwhelmed with covid patients. Many are disgusted at having to put so much time and effort into treating stubborn morons who refuse to get vaccinated or wear masks.

    Quote Originally Posted by Eric Stoner View Post
    "Tax increases resulted in lower tax rates" ? And Bush's tax cuts caused the Financial Crisis , right?
    Then why did we have a boom under Coolidge ? After two tax cuts ? Under LBJ ? Under Clinton ?
    Why didn't Hoover's tax increases restore economic stability ? or FDR's ?
    Why did we have three recessions under Eisenhower ? Stagflation in the 70's ? Why did the deficit increase and recession deepen AFTER Bush Sr.'s tax increases ? Hardly "theoretical " examples. Just historical ones you prefer to completely ignore. Why have the Swiss historically had a sound, healthy economy ? Their tax rates have been consistently lower than those of their neighbors.
    I never said tax cuts are always bad for the economy, or that tax increases are always good for the economy. Tax cuts are beneficial if they don't result in massive increases in debt and deficits, and if they don't result in government not having enough revenue to carry out its responsibilities. The tax cuts in 1964 made sense. The tax cuts passed by Reagan, Bush, and Trump didn't. They're the reason why we have over $26 trillion in debt. When Reagan became President, our national debt was $1 trillion. What do we have to show for this additional $25 trillion in debt? Our infrastructure is falling apart. We've been relying on Russian rockets to send astronauts to the ISS. Over the long term, supply-side tax cuts have been a disaster for our country.

    The first and third recession during Eisenhower's presidency were caused by the Fed raising interest rates over concern about inflation. The second one was caused by a major pandemic. Tax rates had nothing to do with any of them. We had stagflation in the 1970s because of the Arab oil embargo and a decline in our auto industry, because American manufacturers were building massive gas-guzzling vehicles that couldn't compete with the much smaller Japanese vehicles, after the price of gasoline quadrupled. This had nothing to do with tax rates either. Tax rates were the same during the 1970s as they were in the 1960s when the economy was booming.

    Deficits always increase during a recession. They would have increased even more if Bush didn't increase taxes. The recession was caused by the Savings and Loans crisis, which in turn was caused by Reagan's deregulation.

    Switzerland's tax rate is 40%, which is higher than ours. They also have a 7.7% sales tax.

    https://tradingeconomics.com/switzer...ncome-tax-rate

    Again, I did not say higher taxes are always good and lower taxes are always bad. You do insist that lower taxes are always better than higher taxes. The facts contradict your views. If you dispute this, then explain why the economy did better in the 1960s and 1990s, when tax rates were much higher, than in the 1980s and 2000s, when tax rates were much lower, in addition to the fact that we weren't running up trillions of dollars of debt those years. Are you going to go by what happens in the real world, or by your theories?

    Quote Originally Posted by Eric Stoner View Post
    Startups are created during all sorts of economic conditions. SUCCESSFUL startups that employ other people are more likely during periods when capital can be accumulated or borrowed at a reasonable and a fair share of profits can be retained.
    Then how were some of our most successful corporations created in the 1970s, when taxes were much higher, including Apple and Microsoft, the two most valuable American corporations. Which successful corporations were started during the Reagan presidency?
    Last edited by eagle2; 09-10-2021 at 02:16 AM.

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    Default Re: Interest rates in the coming months

    A nurse explaining what it's like working in an ICU unit overnight.

    https://www.reddit.com/r/HermanCainA...nova_with_her/

  7. #132
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    There were also tax increases passed in 1983 and 1984, but the avg. tax rate was about the same. In 1981, the avg. tax rate was 22.6%. After Reagan's tax cuts went into effect in 1982, the avg. tax rate was down to 20.8%. In 1983, it was 20.5%. In 1984 it was 20.8%, and in 1985, it was 20.9%.

    https://www.taxpolicycenter.org/stat...all-households

    Yes, consumer spending increased because interest rates went down, and so did the price of gas. Those were the main reasons why the economy improved during the 1980s. Not because of Reagan's tax cuts. There was little noticeable change in the economy when Reagan's tax cuts went into effect. It was only when the interest rates and price of gas fell, that the economy improved.



    There was already a truck driver shortage when the pandemic started.

    https://www.trucking.org/sites/defau...th%20cover.pdf

    Many nurses left their profession because before there was a vaccine, they didn't want to risk their lives every day at work. There is also a high burnout rate from being overwhelmed with covid patients. Many are disgusted at having to put so much time and effort into treating stubborn morons who refuse to get vaccinated or wear masks.



    I never said tax cuts are always bad for the economy, or that tax increases are always good for the economy. Tax cuts are beneficial if they don't result in massive increases in debt and deficits, and if they don't result in government not having enough revenue to carry out its responsibilities. The tax cuts in 1964 made sense. The tax cuts passed by Reagan, Bush, and Trump didn't. They're the reason why we have over $26 trillion in debt. When Reagan became President, our national debt was $1 trillion. What do we have to show for this additional $25 trillion in debt? Our infrastructure is falling apart. We've been relying on Russian rockets to send astronauts to the ISS. Over the long term, supply-side tax cuts have been a disaster for our country.

    The first and third recession during Eisenhower's presidency were caused by the Fed raising interest rates over concern about inflation. The second one was caused by a major pandemic. Tax rates had nothing to do with any of them. We had stagflation in the 1970s because of the Arab oil embargo and a decline in our auto industry, because American manufacturers were building massive gas-guzzling vehicles that couldn't compete with the much smaller Japanese vehicles, after the price of gasoline quadrupled. This had nothing to do with tax rates either. Tax rates were the same during the 1970s as they were in the 1960s when the economy was booming.

    Deficits always increase during a recession. They would have increased even more if Bush didn't increase taxes. The recession was caused by the Savings and Loans crisis, which in turn was caused by Reagan's deregulation.

    Switzerland's tax rate is 40%, which is higher than ours. They also have a 7.7% sales tax.

    https://tradingeconomics.com/switzer...ncome-tax-rate

    Again, I did not say higher taxes are always good and lower taxes are always bad. You do insist that lower taxes are always better than higher taxes. The facts contradict your views. If you dispute this, then explain why the economy did better in the 1960s and 1990s, when tax rates were much higher, than in the 1980s and 2000s, when tax rates were much lower, in addition to the fact that we weren't running up trillions of dollars of debt those years. Are you going to go by what happens in the real world, or by your theories?



    Then how were some of our most successful corporations created in the 1970s, when taxes were much higher, including Apple and Microsoft, the two most valuable American corporations. Which successful corporations were started during the Reagan presidency?
    The top marginal tax rate did not increase after Reagan's across the board tax cuts. Those are the people most likely to start a business or expand a business and employ other people. Poor people generally do not start businesses and certainly do not employ other people. Btw, as I have pointed out the Tax Policy Center is blatantly biased and cites figures that are shockingly incomplete. They love to try to show that tax cuts cause deficits and never bother to look at the spending side.

    WHY did the price of oil and natural gas go down under Reagan ? Because he deregulated the energy industry. And what happened ? We had an explosion of domestic drilling thus increasing supply and lowering prices. Employment in drilling and related industries shot up. As did WAGES. And PROFITS. ( Sorry to use a dirty word lol.)

    Some blame the Bush Recession on the S & L Crisis. Others look at the Business Cycle and see it was coming to an end. In any event the LAST thing you want during a recession is a tax increase.

    We have a deficit and the National Debt that we do thanks to two decades of irresponsible spending. From a lack of political courage to means test entitlements. From too much "rent seeking ", corporate welfare ( The Export Import Bank being a perfect example ) and crony capitalism. From Bush The Dimmer trying to fight a worldwide war without a tax increase or revenue enhancement of some kind ( a temporary Stock Transfer tax was suggested but the big DEMOCRAT donors on Wall Street got the vapors and shot it down.) From 8 years of attempted wealth transfer under Obama.

    Some historians and economists blame the 1957 Recession on The Asian Flu and a drop in U.S. exports of $4 billion. Others take note that the dummies at The Fed raised interest rates AGAIN. Under Eisenhower we had a top marginal tax rate of 91%. Case closed.

    Switzerland does have a top marginal rate of 40%. BUT they do NOT have a payroll tax and their business taxes are lower. The top corporate tax rate is under 15%. Guess what their Capital Gains Tax Rate is ? ZERO ! More importantly they have lower tax evasion because the average Swiss citizen can look around and SEE that she is getting something for all the taxes she pays and that the wealthy in her country are paying their fair share. They do not have a huge industry devoted to lobbying and tax avoidance. Americans by contrast see a crumbling infrastructure , a soon to be bankrupt Social Security Trust Fund, an incompetent military leadership, a corrupt head of the Allergy and Infectious Disease Administration ( Fauci - Dr. "Mask on, mask off " ) , a dementia riddled nitwit whose staff won't let him answer routine questions , a reportedly alcoholic Number 2 who gets the giggles every time she's asked a question ( please don't shoot the messenger - all of this has been reported ), several major states that are technically bankrupt, relatively low tax rates paid by the super rich, trust fund abuse and other forms of tax avoidance etc. etc. yada yada.

    Reagan's tax cuts and deregulation gave us the longest peacetime boom in our history. 92 consecutive months of economic growth. Despite a Stock Market Crash in 1987. Between 1950 and 1973 REAL economic growth averaged 3.6%. From 1973 to 1982 it went down to 1.6%. Reagan restored it to an average of 3.5%. Under Reagan 35 million new jobs were created. More than half by SMALL businesses. Revenue went from $517 billion to over a Trillion in 1990. In constant, inflation adjusted dollars a 28% increase. As a % of GDP tax revenue went from 18.9 % in 1980 to 18 % in 1990. In constant , inflation adjusted dollars ; a 28 % INCREASE. Revenue from Individual taxes increased from $244 billion in 1980 to $467 billion in 1990. Another 28% INCREASE in constant, inflation adjusted dollars.
    During the same period Federal SPENDING went UP 35.8 %. Defense spending went up 50% up to 1989 BUT then the Peace Dividend kicked in and it fell 15% from 1989 to 1993. Means tested entitlements EXCLUDING Social Security and Medicare ( i.e. those without a Trust Fund and paid out of general revenues ) went up 102% from 1980 to 1993.
    Thanks to the Clinton/Gingrich Welfare Reforms and Gramm/ Rudman spending restraints the rate of increase in those programs dropped to the point where we had a balanced budget and even a surplus AFTER Clinton reluctantly agreed to Capital Gains and Corporate TAX CUTS. Case closed .

    In answer to your question about start-ups , the numbers AFTER Reagan's tax cuts are excellent. According to the IRS the number of S-Corps ( small corporations with less than 35 shareholders ) went Up as follows :
    1982-3 - Up 4.1%
    1982-3- Up 13.9%
    1983-6- Up 8.1 %
    1986-7- UP 31.1 % !!!! ( Note this was after the major Tax Reform of 1986 cutting the top marginal rate to 29% )
    1987- 1990 - Up 11.1 %
    That's an annual average of over a 13% increase.
    During the same period the number of C -Corporations increased an average of 4 % per year and non-farm sole proprietorships increased an average of 5%.

    Bush the Dimmer's tax cuts worked up to a point. So did "you know who's " until we got socked by Covid and the related shutdowns.

    I note you have taken a dive on Coolidge's tax cuts and Hoover's and FDR's tax INCREASES. And LBJ raised taxes too. In 1968 we got an Income Tax surcharge to try and pay for Vietnam.
    Last edited by Eric Stoner; 09-10-2021 at 11:53 AM.
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    The top marginal tax rate did not increase after Reagan's across the board tax cuts. Those are the people most likely to start a business or expand a business and employ other people. Poor people generally do not start businesses and certainly do not employ other people. Btw, as I have pointed out the Tax Policy Center is blatantly biased and cites figures that are shockingly incomplete. They love to try to show that tax cuts cause deficits and never bother to look at the spending side.
    Economic growth comes from demand, not supply, unless you live in a country with a communist command economy. Cutting taxes for the poor and middle class will do far more to stimulate the economy than cutting taxes for the rich. Businesses need people to buy their products, otherwise they won't stay in business very long. Businesses aren't going to hire anyone, unless there is demand for their products. Giving the poor and middle class more money to spend, means that businesses will be able to sell more products, which will then result in businesses hiring more people. This isn't just theoretical. We just saw this happen, when the poor and middle class received stimulus checks, the economy grew at 6%, and more than 2 million jobs were added in 3 months.

    You're attacking the Tax Policy Center because you don't like the facts they present, not because they're showing anything that is inaccurate. The graph I've been going by, shows both tax revenue and government spending.

    Quote Originally Posted by Eric Stoner View Post
    WHY did the price of oil and natural gas go down under Reagan ? Because he deregulated the energy industry. And what happened ? We had an explosion of domestic drilling thus increasing supply and lowering prices. Employment in drilling and related industries shot up. As did WAGES. And PROFITS. ( Sorry to use a dirty word lol.)
    I'm sorry, but you're just inventing your own facts. The price of gas declined under Reagan because the demand declined significantly, due to Americans buying cars that were more fuel efficient and driving less. Our domestic output of oil increased more under Jimmy Carter than under Reagan, and oil output declined during Reagan's 2nd term.

    https://www.forbes.com/sites/rrapier...h=2acc6b832127

    Quote Originally Posted by Eric Stoner View Post
    Some blame the Bush Recession on the S & L Crisis. Others look at the Business Cycle and see it was coming to an end. In any event the LAST thing you want during a recession is a tax increase.

    We have a deficit and the National Debt that we do thanks to two decades of irresponsible spending. From a lack of political courage to means test entitlements. From too much "rent seeking ", corporate welfare ( The Export Import Bank being a perfect example ) and crony capitalism. From Bush The Dimmer trying to fight a worldwide war without a tax increase or revenue enhancement of some kind ( a temporary Stock Transfer tax was suggested but the big DEMOCRAT donors on Wall Street got the vapors and shot it down.) From 8 years of attempted wealth transfer under Obama.
    So why is it that deficits only increased after tax cuts, and decreased after taxes were increased? Are you agreeing with me that taxes were too low under Bush, and his tax cuts didn't increase revenue? How could Democratic donors shoot down a bill, when Congress and the White House were controlled by the GOP?

    Quote Originally Posted by Eric Stoner View Post
    Some historians and economists blame the 1957 Recession on The Asian Flu and a drop in U.S. exports of $4 billion. Others take note that the dummies at The Fed raised interest rates AGAIN. Under Eisenhower we had a top marginal tax rate of 91%. Case closed.
    No, you didn't prove anything. Again, the recessions had nothing to do with tax rates. One of the reasons for the recessions, is Eisenhower wasn't willing to increase spending to stimulate the economy. He was more worried about balancing the budget. I've been stating all along that government should increase spending during economic downturns.

    Quote Originally Posted by Eric Stoner View Post
    Switzerland does have a top marginal rate of 40%. BUT they do NOT have a payroll tax and their business taxes are lower. The top corporate tax rate is under 15%. Guess what their Capital Gains Tax Rate is ? ZERO ! More importantly they have lower tax evasion because the average Swiss citizen can look around and SEE that she is getting something for all the taxes she pays and that the wealthy in her country are paying their fair share. They do not have a huge industry devoted to lobbying and tax avoidance. Americans by contrast see a crumbling infrastructure , a soon to be bankrupt Social Security Trust Fund, an incompetent military leadership, a corrupt head of the Allergy and Infectious Disease Administration ( Fauci - Dr. "Mask on, mask off " ) , a dementia riddled nitwit whose staff won't let him answer routine questions , a reportedly alcoholic Number 2 who gets the giggles every time she's asked a question ( please don't shoot the messenger - all of this has been reported ), several major states that are technically bankrupt, relatively low tax rates paid by the super rich, trust fund abuse and other forms of tax avoidance etc. etc. yada yada.
    Switzerland does have a payroll tax for social security. It's 12.8%, split between businesses and employees. If they have less tax evasion, it's probably because they spend more on enforcing tax compliance.

    Why do you have to turn every discussion into a political argument, and into bashing President Biden, VP Harris, and Dr. Fauci? Anyone who was concerned about our democracy had no choice, but to vote for Biden. Considering you support and twice voted for a lying, racist, sexist, narcissistic sociopath who has the intelligence level and temperament of a child, is responsible for the deaths of hundreds of thousands of Americans, incited a violent insurrection against our government, and tried to destroy our democracy and install himself as dictator, you're not really in a position to criticize any political figures. Please stop. If you want to discuss interest rates and tax rates, I'm fine with that. If you're going to turn this discussion into gaslighting for Trump and against Biden, I'm not interested. It's not just me who finds your defense of this horrible man disturbing. Many of the females here, do as well. If you can't see what's wrong with Trump and why he's not fit to be president, that's your problem, not mine.

    Quote Originally Posted by Eric Stoner View Post
    Reagan's tax cuts and deregulation gave us the longest peacetime boom in our history. 92 consecutive months of economic growth.
    No it did not. We had longer economic expansions under Clinton and Obama. In addition, Clinton balanced the budget and Obama reduced the deficit by over $300 billion. Reagan tripled the deficit.

    Quote Originally Posted by Eric Stoner View Post
    Despite a Stock Market Crash in 1987. Between 1950 and 1973 REAL economic growth averaged 3.6%. From 1973 to 1982 it went down to 1.6%. Reagan restored it to an average of 3.5%. Under Reagan 35 million new jobs were created. More than half by SMALL businesses. Revenue went from $517 billion to over a Trillion in 1990. In constant, inflation adjusted dollars a 28% increase. As a % of GDP tax revenue went from 18.9 % in 1980 to 18 % in 1990. In constant , inflation adjusted dollars ; a 28 % INCREASE. Revenue from Individual taxes increased from $244 billion in 1980 to $467 billion in 1990. Another 28% INCREASE in constant, inflation adjusted dollars.
    During the same period Federal SPENDING went UP 35.8 %. Defense spending went up 50% up to 1989 BUT then the Peace Dividend kicked in and it fell 15% from 1989 to 1993. Means tested entitlements EXCLUDING Social Security and Medicare ( i.e. those without a Trust Fund and paid out of general revenues ) went up 102% from 1980 to 1993.
    Thanks to the Clinton/Gingrich Welfare Reforms and Gramm/ Rudman spending restraints the rate of increase in those programs dropped to the point where we had a balanced budget and even a surplus AFTER Clinton reluctantly agreed to Capital Gains and Corporate TAX CUTS. Case closed.
    No, it's not case closed. GDP growth did not go down to 1.6%. Where did you get that from? GDP growth was 3.25% during Jimmy Carter's presidency, I hardly consider increasing GDP growth from 3.25% to 3.5% to be a major accomplishment, especially when the deficit was tripled. Lower gas prices and interest rates had far more to do with the modest increase in economic growth than tax cuts. We had 5% economic growth under LBJ and 3.9% economic growth under Clinton, which destroys your claim that lower taxes always results in stronger economic growth. Case closed. If you're still going to insist lower taxes leads to stronger economic growth, then explain why we had stronger economic growth under LBJ and Clinton, when tax rates were higher, than we did under Reagan, when tax rates were lower? Why was there barely any difference in GDP growth between Jimmy Carter's presidency and Ronald Reagan's, despite the tax cuts?

    Most years, tax revenue increases without government doing anything, due to economic and population growth. Without Reagan's tax cuts, tax revenue most likely would have increased as much, or more than government spending. In 1981, the year before Reagan's tax cuts went into effect, govt spending accounted for 21.6% of GDP and the budget deficit was $79 billion. In 1990, govt spending accounted for 21.2% of GDP, and the budget deficit had ballooned to $221 billion. Government spending declined as a percentage of GDP from 1981 - 1990, but the budget deficit nearly tripled. Case closed.

    Quote Originally Posted by Eric Stoner View Post

    In answer to your question about start-ups , the numbers AFTER Reagan's tax cuts are excellent. According to the IRS the number of S-Corps ( small corporations with less than 35 shareholders ) went Up as follows :
    1982-3 - Up 4.1%
    1982-3- Up 13.9%
    1983-6- Up 8.1 %
    1986-7- UP 31.1 % !!!! ( Note this was after the major Tax Reform of 1986 cutting the top marginal rate to 29% )
    1987- 1990 - Up 11.1 %
    That's an annual average of over a 13% increase.
    During the same period the number of C -Corporations increased an average of 4 % per year and non-farm sole proprietorships increased an average of 5%.

    Bush the Dimmer's tax cuts worked up to a point. So did "you know who's " until we got socked by Covid and the related shutdowns.
    If Bush's tax cuts worked up to a point, why was economic growth slower than it was before he cut taxes?

    Quote Originally Posted by Eric Stoner View Post
    I note you have taken a dive on Coolidge's tax cuts and Hoover's and FDR's tax INCREASES. And LBJ raised taxes too. In 1968 we got an Income Tax surcharge to try and pay for Vietnam.
    Please read this very carefully, since I've stated this before. I did not say tax cuts are always bad and tax increases are always good. I have nothing against tax cuts that don't result in massive increases in deficits and debt. I don't disagree with Coolidge's tax cuts. Govt spending had declined, due to World War 1 ending, so cutting taxes made sense. As for FDR's tax increases, we had annual economic growth greater than 10% from 1934 - 1936. Tax increases obviously didn't hurt economic growth.

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by eagle2 View Post
    Economic growth comes from demand, not supply, unless you live in a country with a communist command economy. Cutting taxes for the poor and middle class will do far more to stimulate the economy than cutting taxes for the rich. Businesses need people to buy their products, otherwise they won't stay in business very long. Businesses aren't going to hire anyone, unless there is demand for their products. Giving the poor and middle class more money to spend, means that businesses will be able to sell more products, which will then result in businesses hiring more people. This isn't just theoretical. We just saw this happen, when the poor and middle class received stimulus checks, the economy grew at 6%, and more than 2 million jobs were added in 3 months.

    You're attacking the Tax Policy Center because you don't like the facts they present, not because they're showing anything that is inaccurate. The graph I've been going by, shows both tax revenue and government spending.



    I'm sorry, but you're just inventing your own facts. The price of gas declined under Reagan because the demand declined significantly, due to Americans buying cars that were more fuel efficient and driving less. Our domestic output of oil increased more under Jimmy Carter than under Reagan, and oil output declined during Reagan's 2nd term.

    https://www.forbes.com/sites/rrapier...h=2acc6b832127



    So why is it that deficits only increased after tax cuts, and decreased after taxes were increased? Are you agreeing with me that taxes were too low under Bush, and his tax cuts didn't increase revenue? How could Democratic donors shoot down a bill, when Congress and the White House were controlled by the GOP?



    No, you didn't prove anything. Again, the recessions had nothing to do with tax rates. One of the reasons for the recessions, is Eisenhower wasn't willing to increase spending to stimulate the economy. He was more worried about balancing the budget. I've been stating all along that government should increase spending during economic downturns.



    Switzerland does have a payroll tax for social security. It's 12.8%, split between businesses and employees. If they have less tax evasion, it's probably because they spend more on enforcing tax compliance.

    Why do you have to turn every discussion into a political argument, and into bashing President Biden, VP Harris, and Dr. Fauci? Anyone who was concerned about our democracy had no choice, but to vote for Biden. Considering you support and twice voted for a lying, racist, sexist, narcissistic sociopath who has the intelligence level and temperament of a child, is responsible for the deaths of hundreds of thousands of Americans, incited a violent insurrection against our government, and tried to destroy our democracy and install himself as dictator, you're not really in a position to criticize any political figures. Please stop. If you want to discuss interest rates and tax rates, I'm fine with that. If you're going to turn this discussion into gaslighting for Trump and against Biden, I'm not interested. It's not just me who finds your defense of this horrible man disturbing. Many of the females here, do as well. If you can't see what's wrong with Trump and why he's not fit to be president, that's your problem, not mine.



    No it did not. We had longer economic expansions under Clinton and Obama. In addition, Clinton balanced the budget and Obama reduced the deficit by over $300 billion. Reagan tripled the deficit.



    No, it's not case closed. GDP growth did not go down to 1.6%. Where did you get that from? GDP growth was 3.25% during Jimmy Carter's presidency, I hardly consider increasing GDP growth from 3.25% to 3.5% to be a major accomplishment, especially when the deficit was tripled. Lower gas prices and interest rates had far more to do with the modest increase in economic growth than tax cuts. We had 5% economic growth under LBJ and 3.9% economic growth under Clinton, which destroys your claim that lower taxes always results in stronger economic growth. Case closed. If you're still going to insist lower taxes leads to stronger economic growth, then explain why we had stronger economic growth under LBJ and Clinton, when tax rates were higher, than we did under Reagan, when tax rates were lower? Why was there barely any difference in GDP growth between Jimmy Carter's presidency and Ronald Reagan's, despite the tax cuts?

    Most years, tax revenue increases without government doing anything, due to economic and population growth. Without Reagan's tax cuts, tax revenue most likely would have increased as much, or more than government spending. In 1981, the year before Reagan's tax cuts went into effect, govt spending accounted for 21.6% of GDP and the budget deficit was $79 billion. In 1990, govt spending accounted for 21.2% of GDP, and the budget deficit had ballooned to $221 billion. Government spending declined as a percentage of GDP from 1981 - 1990, but the budget deficit nearly tripled. Case closed.



    If Bush's tax cuts worked up to a point, why was economic growth slower than it was before he cut taxes?



    Please read this very carefully, since I've stated this before. I did not say tax cuts are always bad and tax increases are always good. I have nothing against tax cuts that don't result in massive increases in deficits and debt. I don't disagree with Coolidge's tax cuts. Govt spending had declined, due to World War 1 ending, so cutting taxes made sense. As for FDR's tax increases, we had annual economic growth greater than 10% from 1934 - 1936. Tax increases obviously didn't hurt economic growth.
    Oh dear. Before we go further I'll leave the current doddering wreck out of the discussion if you can manage to avoid trying to tar me with the same brush as "you know who". How do you know who I voted for ? If anything ought to be out of bounds on this board it ought to be how people vote. That said, I NEVER voted for "you know who ". In both elections where he ran I left the line for "you know what" blank. I'll accept all that goes with "you know who ; the good and the bad. You get Afghanistan and all the damage that goes with it, an open border , mask mandates for little kids and high inflation. Just to hit the lowlights. I could go on for pages.

    Like you, the Tax Policy Center tries to show that tax cuts create deficits. I have cited numbers that show that Reagan's tax cuts resulted in increased revenues. By 1990 , tax revenues had doubled. Annual GDP was running at an average of 3.5%. When did Obama ever give us annual growth of 3.5% or anything resembling it ?

    I am glad you support tax cuts for the poor and middle class. As you point out it enables them to spend more of THEIR money and of course I support that. Tax Rate Cuts for the higher earners enable them to start new businesses or expand existing ones which enables them to hire more people. To build new plants or expand existing ones. Which results in more people being hired. Those people with jobs are able to afford to buy things thus generating more demand. That is what the Supply Side is all about. Under Obama unemployment gradually went down but the Labor Participation Rate also went down. Under "you know who" Unemployment went down to record lows especially among Blacks and Hispanics while the Labor Participation Rate went up. As did REAL Wages.

    As for oil production did you READ your own link ? Occasionally you post a link claiming that it says one thing but then an actual reading of same shows that your claim is either incomplete or otherwise factually delinquent. Domestic oil production went UP in Reagan's first term. We also had a strong dollar which made oil imports cheaper. We had lowered demand thanks to a severe recession. After the recovery while many Americans bought more fuel efficient cars , a lot went back to buying muscle cars , pickups and other gas guzzlers. Which btw, had been re-engineered to be more fuel efficient and guzzle less.

    A Stock Transfer and/or Financial Transaction Tax was proposed under Bush The Dim to help pay for the wars in Afghanistan and Iraq. Among the most virulent opponents were Chuck Schumer and Hillary. While in the minority, under Senate rules 60 votes are required for cloture. That's A reason the proposal never got off the ground. While generally getting an F in basic economics , Chuck Schumer has been a reliable toady for Wall Street interests from whom he gets most of his campaign cash. So was Hillary when she was in the Senate. I did not give her the nickname "the Senator from Goldman Sachs". She earned that on her own.

    From 1973 to 1982 , taking in the terms of Nixon , Ford, Carter and the start of Reagan's, economic growth averaged 1.6 %. We had sluggish growth under Nixon, a serious recession under Ford and the start of a VERY serious recession under Carter that worsened and deepened under Reagan in 1981 and 1982 before the Great Recovery began. And it was a great recovery. 92 months of economic growth from late 1982 to early 1990. 35 million new jobs.
    How many new jobs were created under Carter ? Under Obama ? Under Reagan we got an increase in Labor Participation. Plus increases in REAL wages. All with low inflation.

    As far as FDR is concerned, you are being VERY selective. He increased taxes as part of his New Deal BUT after cutting spending in 1937 he also raised taxes. BOTH spending cuts and tax rate increases gave us the Great Recession of 1938-9. I hope that YOU just read that carefully because I have posted that historical tidbit many times . Like Krugman you only want to acknowledge the spending cuts while ignoring the tax increases. Why did FDR cut spending and raise taxes ? Because he wanted to try and balance the budget. The recession of 1938 made it worse. And neither of us have mentioned the dummies at the Fed. Guess what they did ? That's right. They raised interest rates.


    I cited the revenue and spending numbers that I did which clearly show revenue doubled by 1990 and spending increased further and faster than the increases in revenue. Reagan was not blameless afaic. Some of his increased defense spending was not necessary and to get his tax cuts passed he had to "feed the pigs" in Congress as revealed by David Stockman in his infamous Atlantic interview. He also made a lousy deal later on with Congress. He agreed to raise revenues in exchange for dollar for dollar spending cuts. Revenue increased but Congress never cut a nickel. That made what Bush The Brighter did even more unforgiveable. Having been Veep when Congress reneged on Reagan ; knowing they couldn't be trusted to cut spending he agreed to tax increases anyway. The recession we were in at the tine worsened and the deficit increased.
    In contrast , Clinton had Gramm Rudman to reduce both defense and non defense spending. After he cut Capital Gains and Corporate Taxes we had a balanced budget and even a surplus for the first time since 1969 under Nixon.

    How do you know what would have happened without Reagan's tax cuts ? For the seven prior years economic growth had averaged 1.6% per year. Btw, if you don't like that or any other number I cite please take it up with the BLS, Census Bureau and other Federal agencies that post the numbers. Will you please tell me WHERE you get numbers that show that we had better economic growth under Carter than under Reagan ? That's four years of Carter while Reagan's policies actually ran for ten years , taking in the first two years of Daddy Bush.

    I assume you are talking about Bush The Dim in your last point. The business cycle was slowing down, Greenspan had raised interest rates and we were going into the Financial Crisis.

    I applaud you for supporting Coolidge's tax cuts. Many liberal economists have tried to argue that his tax cuts helped cause the Great Depression and that Bush The Dim's tax cuts helped cause the Financial Crisis. No. I am not including you. That's from the fever swamp occupied by Dean Baker and Paul Krugman, just to name two.
    Last edited by Eric Stoner; 09-14-2021 at 08:15 AM.
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Oh dear. Before we go further I'll leave the current doddering wreck out of the discussion if you can manage to avoid trying to tar me with the same brush as "you know who". How do you know who I voted for ? If anything ought to be out of bounds on this board it ought to be how people vote. That said, I NEVER voted for "you know who ". In both elections where he ran I left the line for "you know what" blank. I'll accept all that goes with "you know who ; the good and the bad. You get Afghanistan and all the damage that goes with it, an open border , mask mandates for little kids and high inflation. Just to hit the lowlights. I could go on for pages.
    Sorry. I thought you voted for him because you frequently praise and defend him, and bash Biden and Clinton. President Biden's predecessor is the one who signed the withdrawal agreement with the Taliban and released over 5,000 of their fighters from prison, not Biden. We do not have an open border. The President isn't the one who issues mask mandates in schools. In case you're not aware, in some states, hospital pediatric units are being filled with children who have covid. Just because you oppose a policy, doesn't mean it's wrong. Inflation is being cause by supply chain issues. There isn't much the President can do about it. Inflation is about what it was expected to be.

    Quote Originally Posted by Eric Stoner View Post
    Like you, the Tax Policy Center tries to show that tax cuts create deficits. I have cited numbers that show that Reagan's tax cuts resulted in increased revenues. By 1990 , tax revenues had doubled Annual GDP was running at an average of 3.5%. When did Obama ever give us annual growth of 3.5% or anything resembling it ?
    Tax cuts do create or increase deficits, at least they did with Reagan, Bush Jr, and Trump. You do not understand the concept, that tax revenue generally increases from one year to the next, if no changes are made to the tax code.

    Quote Originally Posted by Eric Stoner View Post
    I am glad you support tax cuts for the poor and middle class. As you point out it enables them to spend more of THEIR money and of course I support that. Tax Rate Cuts for the higher earners enable them to start new businesses or expand existing ones which enables them to hire more people. To build new plants or expand existing ones. Which results in more people being hired. Those people with jobs are able to afford to buy things thus generating more demand. That is what the Supply Side is all about. Under Obama unemployment gradually went down but the Labor Participation Rate also went down. Under "you know who" Unemployment went down to record lows especially among Blacks and Hispanics while the Labor Participation Rate went up. As did REAL Wages.
    You don't understand the basic laws of supply and demand. Businesses don't expand just because they have more money. Businesses expand when demand for their product(s) increases. This isn't just theoretical. In 2010, corporations had record cash levels, but weren't expanding, because the demand wasn't there. If lowering taxes results in higher deficits, which it has for the past 40 years, it can make it more difficult for businesses to expand because the more borrowing the govt does, the less there is for businesses to borrow.

    The avg. tax rate during Obama's first term was lower than it was when Reagan was President. Why was growth so slow with such low taxes?

    You also don't understand the concept, that if annual economic growth, job, growth, and wage growth is about the same for two consecutive presidents, the one who starts out with the lower unemployment and higher wages is going to end up with lower unemployment and higher wages, even if economic numbers are about the same for both of them. There is little difference in job growth, economic growth, and wage growth between Obama's 2nd term and Trump's first three years. Trump just happened to start out with 4.5% unemployment and Obama started with unemployment greater than 9%.

    Quote Originally Posted by Eric Stoner View Post
    As for oil production did you READ your own link ? Occasionally you post a link claiming that it says one thing but then an actual reading of same shows that your claim is either incomplete or otherwise factually delinquent. Domestic oil production went UP in Reagan's first term. We also had a strong dollar which made oil imports cheaper. We had lowered demand thanks to a severe recession. After the recovery while many Americans bought more fuel efficient cars , a lot went back to buying muscle cars , pickups and other gas guzzlers. Which btw, had been re-engineered to be more fuel efficient and guzzle less.
    I never said that domestic oil production didn't go up during Reagan's first term. I said that it didn't increase as much as it did when Jimmy Carter was in office. The price of oil is based on supply and demand, regardless of how weak or strong the dollar is, since oil is priced in dollars on the market.

    Quote Originally Posted by Eric Stoner View Post
    A Stock Transfer and/or Financial Transaction Tax was proposed under Bush The Dim to help pay for the wars in Afghanistan and Iraq. Among the most virulent opponents were Chuck Schumer and Hillary. While in the minority, under Senate rules 60 votes are required for cloture. That's A reason the proposal never got off the ground. While generally getting an F in basic economics , Chuck Schumer has been a reliable toady for Wall Street interests from whom he gets most of his campaign cash. So was Hillary when she was in the Senate. I did not give her the nickname "the Senator from Goldman Sachs". She earned that on her own.
    Budgetary items such as tax matters, can be passed through reconciliation, with 50 votes and the VP. That's why Trump was able to get his tax cuts without 60 votes in the Senate. Bush and the GOP Congress could have passed any tax increases they wanted, without a single Democratic vote.

    Quote Originally Posted by Eric Stoner View Post
    From 1973 to 1982 , taking in the terms of Nixon , Ford, Carter and the start of Reagan's, economic growth averaged 1.6 %. We had sluggish growth under Nixon, a serious recession under Ford and the start of a VERY serious recession under Carter that worsened and deepened under Reagan in 1981 and 1982 before the Great Recovery began. And it was a great recovery. 92 months of economic growth from late 1982 to early 1990. 35 million new jobs.
    How many new jobs were created under Carter ? Under Obama ? Under Reagan we got an increase in Labor Participation. Plus increases in REAL wages. All with low inflation.
    Why are you starting in 1983? Reagan took office in 1981, not 1983. I have no idea where you got this 1.6% from. Not once do you provide a link to your source. Again, we had 3.25% economic growth under Jimmy Carter. I have no idea where you got 35 million jobs from either. Job growth wasn't even close to that. On avg. more jobs were created per year under Jimmy Carter than under Ronald Reagan. If you just go by Reagan's second term, there were slightly more jobs created under Reagan, but percentage wise, Jimmy Carter did better. More jobs were created in 8 yrs. under Bill Clinton, than in 12 yrs. under Reagan/Bush. Under Jimmy Carter, 10.3 million jobs were created over 4 yrs. Under Reagan and Bush, approximately 16 million jobs were created over 12 yrs. Under Clinton, 23.6 million jobs were created over 8 years.

    Source:
    https://en.wikipedia.org/wiki/Jobs_c...four-year_term
    (note how I link to my source)

    Please explain why we had higher economic growth and job creation under Clinton, when taxes were much higher, than under Reagan, when taxes were much lower.

    I'm not sure why you keep bringing up Obama, when I haven't mentioned him. I previously asked you why we had stronger growth under LBJ and Clinton, when taxes were higher, than under Reagan, and you still haven't answered.

    Quote Originally Posted by Eric Stoner View Post
    As far as FDR is concerned, you are being VERY selective. He increased taxes as part of his New Deal BUT after cutting spending in 1937 he also raised taxes. BOTH spending cuts and tax rate increases gave us the Great Recession of 1938-9. I hope that YOU just read that carefully because I have posted that historical tidbit many times . Like Krugman you only want to acknowledge the spending cuts while ignoring the tax increases. Why did FDR cut spending and raise taxes ? Because he wanted to try and balance the budget. The recession of 1938 made it worse. And neither of us have mentioned the dummies at the Fed. Guess what they did ? That's right. They raised interest rates.
    When unemployment is high, government should be more worried about creating jobs than balancing the budget. FDR did raise taxes and cut spending, but economic growth resumed when he increased spending, without cutting taxes.

    Quote Originally Posted by Eric Stoner View Post
    I cited the revenue and spending numbers that I did which clearly revenue doubled by 1990 and spending increased further and faster than the increases in revenue. Reagan was not blameless afaic. Some of his increased defense spending was not necessary and to get his tax cuts passed he had to "feed the pigs" in Congress as revealed by David Stockman in his infamous Atlantic interview. He also made a lousy deal later on with Congress. He agreed to raise revenues in exchange for dollar for dollar spending cuts. Revenue increased but Congress never cut a nickel. That made what Bush The Brighter did even more unforgiveable. Having been Veep when Congress reneged on Reagan ; knowing they couldn't be trusted to cut spending he agreed to tax increases anyway. The recession we were in at the tine worsened and the deficit increased.
    In contrast , Clinton had Gramm Rudman to reduce both defense and non defense spending. After he cut Capital Gains and Corporate Taxes we had a balanced budget and even a surplus for the first time since 1969 under Nixon.
    He didn't double revenue if you exclude 1981, when tax rates were higher. Has it ever occurred to you that we had stronger economic growth under Reagan than Obama, because Congress cut spending during Obama's second term?

    Under Clinton, we had a balanced budget before any tax cuts went into effect.

    Quote Originally Posted by Eric Stoner View Post
    How do you know what would have happened without Reagan's tax cuts ? For the seven prior years economic growth had averaged 1.6% per year. Btw, if you don't like that or any other number I cite please take it up with the BLS, Census Bureau and other Federal agencies that post the numbers. Will you please tell me WHERE you get numbers that show that we had better economic growth under Carter than under Reagan ? That's four years of Carter while Reagan's policies actually ran for ten years , taking in the first two years of Daddy Bush.
    Unless you link to your source, the numbers are coming from you, and not anyone else. I don't know where you got the 1.6% from, but under Carter, gdp growth was 3.25%. If you compare Reagan's economic growth to other presidents, it's really not that spectacular.

    Last edited by eagle2; 09-14-2021 at 01:45 AM.

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    Default Re: Interest rates in the coming months

    I have NEVER praised or defended "you know who". My posts have made it quite clear that I do not like him and NEVER did. I have praised and defended some , repeat SOME of his policies. You are entitled to your opinion about him and the current occupant but not your own facts.

    Who was in charge of our withdrawl ? Who was C in C at the time ? Who ordered our military out of Bagram in the dead of night without informing the Afghani military ? Who withdrew our military first and then had to send them back in to get out our civilians and Afghani allies ? Who has failed to vaccinate the Afghani refugees ? Or those crossing our Southern border ? Who left behind AT LEAST 100 Americans ? Most estimates are MUCH higher. Who left behind thousands of Afghanis who helped us over the last 20 years ? Who relied on the Taliban to provide external security at the Kabul airport ? Who released the current top leadership of the Taliban, Al Queda and ISIS ? Well, actually it was Obama back in 2014 as part of the Beau Berghdahl deal.
    It would be funny if it were not so tragic for anyone to blame the Afghanistan fiasco on "you know who". Senile Joe was free to change any part of Trump's plan that he wanted. Btw for the last 18 months of Trump's tenure guess how many Americans were killed in Afghanistan ? ZERO ! Yes, "you know who" made a deal with the Taliban for us to get out. He also made it clear that if they tried to cheat in any way he would bomb the hell out of them. He told their leadership he knew where they and their families lived. When they broke the agreement he bombed them back into compliance. Senile Joe claimed that he retaliated for the 13 Americans killed at the Kabul airport with an airstrike on an unnamed ISIS K leader. Now we know why that leader wasn't named. Because we mistakenly bombed and killed an innocent Afghani and his children. An Aid worker , his 7 children and two others. Did you watch Blinken wet his pants over it yesterday ? The two botched drone strikes have been reported by BOTH the New York Times and The Washington Post; not to mention Politico.
    Are you going to seriously tell me that Joe has all his faculties ? We know he was a stutterer ( which he overcame to embark political and grifting career ) but 5 years ago he had no trouble putting two sentences together in an intelligible way. Why can't he do it now ? Except with a teleprompter and even then he has trouble giving a coherent speech. Why does he need his staff to decide if and when he will answer questions and only from carefully preselected reporters ? Or to cut off his microphone as happened just the other day ?

    If tax cuts increase deficits then why didn't Coolidge's tax cuts increase the deficit ? Why didn't Clinton's tax cuts increase the deficit ? Because BOTH cut spending !

    Rather than argue with you about who took what course in college I'll fall back on having built not one but two successful businesses. So I must have learned something about supply and demand. Most of our disagreement in this area is theory vs. practical reality. Why is unemployment lower in most states that have done away with enhanced unemployment benefits ? Why are most restaurants in NYC understaffed ? Many dramatically so ?There is plenty of demand . Just not enough workers ; even with substantial pay increases.

    A strong dollar makes imports cheaper. Or were you out that day in International Trade 101 lol ? We had a strong dollar under Reagan ( and under Clinton btw) and oil imports were comparatively cheaper. In fact it was often cheaper to import oil than produce it domestically. Checked out gas prices over the past 8 months ? Under "you know who " we were energy independent. Now we are back to being a net importer.

    You obviously have forgotten recent history and/or don't know how the Senate works. First of all, all tax and spending bills MUST originate in the House. More importantly , neither Schumer not Hillary lifted a finger to try and raise revenue when Bush the Dim was POTUS. That said, we can agree that Bush should have raised revenues to pay for his wars.

    Reagan took office in 1981. Phase ONE of his tax cuts were passed in 1981. They took effect in 1982. Phase TWO took effect in 1983.
    Go back and review the history of those cuts. Reagan took "half a loaf" agreeing to phase in the cuts rather than let them take effect all at once. By 1983 they were in full effect.

    For economic growth from 1973 ( when NIXON was President ) to 1982 ( Reagan had been in office for 2 years ) REAL economic growth ( that is adjusted for inflation , in current dollars ) AVERAGED 1.6 %. Remember STAGFLATION ? The STAG part was a STAGNANT low growth economy. The FLATION was the concurrent inflation. That 1.6% number is historical fact readily accessible from a multitude of sources. For some reason you are deliberately trying to manufacture a claim by me that it was all under Carter. It was not and I am posting AGAIN that it includes The Nixon-Ford Term and the first half of Reagan's first term. Carter's first two years were fairly good. The recovery begun under Ford continued into 1977, 1978 and 1979.

    Rather than argue further here are the REAL GDP numbers from multpl.com citing the U.S. Bureau of Economic Analysis. If you don't like these numbers please send either or both a strong letter lol.

    1973- 4.02%
    1974- - 1.95
    1975- 2.56
    1976- 4.31
    1977- 5.01
    1978- 6.60
    1979 - 1.28
    1980- -0.04
    1981- 1.3
    1982 - -1.44
    1983 - 7.9
    1984 -5.58
    1985 - 4.18
    1986- 2.91
    1987 - 4.48
    1988 - 3.80
    1989 - 2.74
    1990- 0.60
    1991- 1.17
    1992- 4.38
    1993 - 2.61
    1994- 4.12
    1995 - 2.20
    1996- 4.42
    1997- 4.49
    1998- 4.88
    1999- 4.83
    2000- 2.90
    2001 -0.17
    2002- 1.99
    2003- 4.30
    2004-3.36
    2005- 2.98
    2006- 2.61
    2007- 2.16
    2008- - 2.54
    2009- .08
    2010- 2.79
    2011- 1.52
    2012- 1.57
    2013 - 2.53
    2014- 2.56
    2015- 1.88
    2016- 2.00
    2017- 2.72
    2018- 2.32
    2019- 2.57
    2020- - 2.26
    For 2021 up to and including June it is 12.18%.

    As I said. REAL economic growth from 1973 to 1982 AVERAGED 1.6 %. That takes in 3 years of recessionary negative growth aka contraction and 3 other years with growth below 2 %. Carter's first two years really carried over from the Ford recovery of 1976 but Carter was in office so he gets the credit. The rebound under Reagan was far higher than the recession had been low. Even the Financial Crisis only gave us a 2.5% contraction in 2008 and a flat 2009. Under Clinton the numbers for his Second Term are better than for his first. I n his first he RAISED taxes. In his Second he CUT taxes while giving us spending cuts. Obama was not able to give us a single year of 3% growth or better. We were en route to one under "you know who " when Covid slammed on the brakes and the shutdowns put us into recession. While the growth numbers under him were not impressive the employment and REAL wage numbers were. Inter alia, trade conflicts are not good for economic growth .

    You say Clinton balanced the budget BEFORE his tax cuts took effect. Okay. Then why wasn't there a deficit after they did ? Why did revenues increase ?
    Under FDR economic growth "resumed" when he had us become the Arsenal Of Democracy starting in late 1939 into 1940 and beyond. By 1941 we were edging into a wartime economy ( peacetime draft , Two-Ocean Navy Act , Lend-Lease ) BEFORE Pearl Harbor. Even FDR and his economic advisors couldn't screw that up lol.
    Last edited by Eric Stoner; 09-14-2021 at 10:59 AM.
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    I have NEVER praised or defended "you know who". My posts have made it quite clear that I do not like him and NEVER did. I have praised and defended some , repeat SOME of his policies. You are entitled to your opinion about him and the current occupant but not your own facts.

    Who was in charge of our withdrawl ? Who was C in C at the time ? Who ordered our military out of Bagram in the dead of night without informing the Afghani military ? Who withdrew our military first and then had to send them back in to get out our civilians and Afghani allies ? Who has failed to vaccinate the Afghani refugees ? Or those crossing our Southern border ? Who left behind AT LEAST 100 Americans ? Most estimates are MUCH higher. Who left behind thousands of Afghanis who helped us over the last 20 years ? Who relied on the Taliban to provide external security at the Kabul airport ? Who released the current top leadership of the Taliban, Al Queda and ISIS ? Well, actually it was Obama back in 2014 as part of the Beau Berghdahl deal.
    It would be funny if it were not so tragic for anyone to blame the Afghanistan fiasco on "you know who". Senile Joe was free to change any part of Trump's plan that he wanted. Btw for the last 18 months of Trump's tenure guess how many Americans were killed in Afghanistan ? ZERO ! Yes, "you know who" made a deal with the Taliban for us to get out. He also made it clear that if they tried to cheat in any way he would bomb the hell out of them. He told their leadership he knew where they and their families lived. When they broke the agreement he bombed them back into compliance. Senile Joe claimed that he retaliated for the 13 Americans killed at the Kabul airport with an airstrike on an unnamed ISIS K leader. Now we know why that leader wasn't named. Because we mistakenly bombed and killed an innocent Afghani and his children. An Aid worker , his 7 children and two others. Did you watch Blinken wet his pants over it yesterday ? The two botched drone strikes have been reported by BOTH the New York Times and The Washington Post; not to mention Politico.
    Are you going to seriously tell me that Joe has all his faculties ? We know he was a stutterer ( which he overcame to embark political and grifting career ) but 5 years ago he had no trouble putting two sentences together in an intelligible way. Why can't he do it now ? Except with a teleprompter and even then he has trouble giving a coherent speech. Why does he need his staff to decide if and when he will answer questions and only from carefully preselected reporters ? Or to cut off his microphone as happened just the other day ?
    Biden did a poor job with the withdrawal and Trump made an awful deal with the Taliban. Now can you please stop bringing politics into this discussion?

    Quote Originally Posted by Eric Stoner View Post
    If tax cuts increase deficits then why didn't Coolidge's tax cuts increase the deficit ? Why didn't Clinton's tax cuts increase the deficit ? Because BOTH cut spending !
    I didn't say tax cuts increase the deficit. I said that Reagan's, Bush's, and Trump's tax cuts increased the deficit. As I've been saying all along, I'm not opposed to tax cuts if they don't result in huge increases in deficits and national debt.

    Quote Originally Posted by Eric Stoner View Post
    Rather than argue with you about who took what course in college I'll fall back on having built not one but two successful businesses. So I must have learned something about supply and demand. Most of our disagreement in this area is theory vs. practical reality. Why is unemployment lower in most states that have done away with enhanced unemployment benefits ? Why are most restaurants in NYC understaffed ? Many dramatically so ?There is plenty of demand . Just not enough workers ; even with substantial pay increases.
    What you're saying is theory, what I'm saying is what happens in the real world. You're saying that giving businesses and the wealthy more money by cutting their taxes, will result in them investing more in their businesses and hiring more people. I say that businesses aren't going to invest more and hire more workers unless demand for their product(s) increases, regardless of how much money they have. In the real world in 2010, American corporations had a record $1.84 trillion in cash, yet business investment and hiring was very low. Why is that? Why weren't they investing all of that money on capital and new hires?

    Why are you making such a big deal over whether or not states extend unemployment for an extra two months? Some states that extended unemployment payments have low unemployment, others don't.

    Quote Originally Posted by Eric Stoner View Post
    A strong dollar makes imports cheaper. Or were you out that day in International Trade 101 lol ? We had a strong dollar under Reagan ( and under Clinton btw) and oil imports were comparatively cheaper. In fact it was often cheaper to import oil than produce it domestically. Checked out gas prices over the past 8 months ? Under "you know who " we were energy independent. Now we are back to being a net importer.
    That only applies when you're importing products priced in a different currency. Oil is always priced in US dollars.

    Quote Originally Posted by Eric Stoner View Post
    You obviously have forgotten recent history and/or don't know how the Senate works. First of all, all tax and spending bills MUST originate in the House. More importantly , neither Schumer not Hillary lifted a finger to try and raise revenue when Bush the Dim was POTUS. That said, we can agree that Bush should have raised revenues to pay for his wars.
    None of this changes the fact that the Senate could have passed a tax increase with 50 votes. The GOP wouldn't have needed a single Democrat to pass a tax increase.

    Quote Originally Posted by Eric Stoner View Post
    Reagan took office in 1981. Phase ONE of his tax cuts were passed in 1981. They took effect in 1982. Phase TWO took effect in 1983.
    Go back and review the history of those cuts. Reagan took "half a loaf" agreeing to phase in the cuts rather than let them take effect all at once. By 1983 they were in full effect.

    For economic growth from 1973 ( when NIXON was President ) to 1982 ( Reagan had been in office for 2 years ) REAL economic growth ( that is adjusted for inflation , in current dollars ) AVERAGED 1.6 %. Remember STAGFLATION ? The STAG part was a STAGNANT low growth economy. The FLATION was the concurrent inflation. That 1.6% number is historical fact readily accessible from a multitude of sources. For some reason you are deliberately trying to manufacture a claim by me that it was all under Carter. It was not and I am posting AGAIN that it includes The Nixon-Ford Term and the first half of Reagan's first term. Carter's first two years were fairly good. The recovery begun under Ford continued into 1977, 1978 and 1979.
    Do you know how to calculate averages? Average gdp growth from 1973 - 1982 was 2.85%, based on your numbers below.

    Quote Originally Posted by Eric Stoner View Post
    Rather than argue further here are the REAL GDP numbers from multpl.com citing the U.S. Bureau of Economic Analysis. If you don't like these numbers please send either or both a strong letter lol.

    1973- 4.02%
    1974- - 1.95
    1975- 2.56
    1976- 4.31
    1977- 5.01
    1978- 6.60
    1979 - 1.28
    1980- -0.04
    1981- 1.3
    1982 - -1.44
    1983 - 7.9
    1984 -5.58
    1985 - 4.18
    1986- 2.91
    1987 - 4.48
    1988 - 3.80
    1989 - 2.74
    1990- 0.60
    1991- 1.17
    1992- 4.38
    1993 - 2.61
    1994- 4.12
    1995 - 2.20
    1996- 4.42
    1997- 4.49
    1998- 4.88
    1999- 4.83
    2000- 2.90
    2001 -0.17
    2002- 1.99
    2003- 4.30
    2004-3.36
    2005- 2.98
    2006- 2.61
    2007- 2.16
    2008- - 2.54
    2009- .08
    2010- 2.79
    2011- 1.52
    2012- 1.57
    2013 - 2.53
    2014- 2.56
    2015- 1.88
    2016- 2.00
    2017- 2.72
    2018- 2.32
    2019- 2.57
    2020- - 2.26
    If you average 1973 - 1982, it comes to 2.85%


    Quote Originally Posted by Eric Stoner View Post
    For 2021 up to and including June it is 12.18%.
    It's around 6.5%. The 6.4 - 6.5 percent growth each quarter is the annual rate the economy grew, not the actual growth for the quarter.

    Quote Originally Posted by Eric Stoner View Post
    As I said. REAL economic growth from 1973 to 1982 AVERAGED 1.6 %. That takes in 3 years of recessionary negative growth aka contraction and 3 other years with growth below 2 %. Carter's first two years really carried over from the Ford recovery of 1976 but Carter was in office so he gets the credit. The rebound under Reagan was far higher than the recession had been low. Even the Financial Crisis only gave us a 2.5% contraction in 2008 and a flat 2009. Under Clinton the numbers for his Second Term are better than for his first. I n his first he RAISED taxes. In his Second he CUT taxes while giving us spending cuts. Obama was not able to give us a single year of 3% growth or better. We were en route to one under "you know who " when Covid slammed on the brakes and the shutdowns put us into recession. While the growth numbers under him were not impressive the employment and REAL wage numbers were. Inter alia, trade conflicts are not good for economic growth .
    As I said before, we had slow economic growth when Obama was in office because Congress cut spending.

    Quote Originally Posted by Eric Stoner View Post
    You say Clinton balanced the budget BEFORE his tax cuts took effect. Okay. Then why wasn't there a deficit after they did ? Why did revenues increase ?
    Under FDR economic growth "resumed" when he had us become the Arsenal Of Democracy starting in late 1939 into 1940 and beyond. By 1941 we were edging into a wartime economy ( peacetime draft , Two-Ocean Navy Act , Lend-Lease ) BEFORE Pearl Harbor. Even FDR and his economic advisors couldn't screw that up lol.
    Clinton increased taxes a lot more than he cut them.

    As I've been saying, increased govt spending results in increased economic growth. The massive increase in spending on the military, from 1940 -1945 resulted in massive increase in economic growth.
    Last edited by eagle2; 09-14-2021 at 04:50 PM.

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    Default Re: Interest rates in the coming months

    I am taking a dive on your first two points to avoid getting too political.

    You claim an exclusive on "reality " but then seem to blithely ignore all the lessons from economic history. You give yourself away with phrases like " giving businesses and the wealthy more money " What do you mean "giving " ? Who is giving what to whom ? I advocate letting EVERYBODY keep more of their own hard earned money and encouraging them to work, save and invest more with the incentive of letting them keep more of the proceeds. Here is the nub of our fundamental disagreement. You seem to think that growth is function of stimulating demand . I rely on HISTORY to show that demand is a function of supply. When did we have stable LONG TERM economic growth , low unemployment , a strong dollar and low inflation ? Under Reagan and Clinton. Before them , we had those things for a few years under LBJ and before him we have to go all the way back to Coolidge. In any event supply is stimulated by removing tax , regulatory, trade and monetary barriers to production. You seem to think that when demand is lacking ( often by a misreading of the economy in general and various markets in particular ) that the Federal government ought to step in and increase spending. History has shown that such a policy will work . For a while. FDR's policies all ran out of gas. W.W.II came to an end , so did "52-20" , as did the Bush The Dim and Obama policies. You are not wrong when you say that demand focused economic medication works faster than supply side remedies. But what worked far better for much longer were the Reagan - Clinton policies. Long term therapy vs. short term pain relief. Can you point to a single demand side program that gave us long term growth with low inflation ?

    While I think he was a disgusting creep on many levels ( Ooops !, sorry for the political lapse ) Clinton was an excellent listener and a good learner. One of the people he listened to was Arthur Laffer who persuaded him to listen to Rubin and Summers and enact strong dollar policies. Inter alia that gave us lower oil prices ( in 1998 I remember paying less than a dollar for a gallon of regular ) Among other things, lower energy prices functioned as a consumer tax cut along with Clinton's other cuts which is how we got the healthy economy we did in his Second Term . Lower energy costs trickle throughout the economy lowering the costs of lots of other everyday things. Like food and rents. Higher energy costs obviously have the opposite effect. That we are witnessing now. But I digress.

    There were a lot of reasons why corporations sat around fat , dumb and happy in 2010 and thereafter rather than invest their surpluses. To explain it I would REALLY have to get political so I'll just remind you who was the President. at the time , what his policies were ( I doubt anyone would call them "pro-business" ) and leave it at that. If you want to accuse me of taking a dive, go ahead. I can take it. Btw, we agree that Bush The Dim ought to have raised taxes to pay for his wars.

    As for oil prices, you seem to forget relatively recent economic history. Prior to Nixon we always had relatively stable , comparatively low oil prices. Under him we had The Arab Oil Embargo and then "oil shocks" under Ford and Carter. Nixon cut the last link between the dollar and gold when he closed the gold "window". As predicted the value of the dollar plunged against oil, gold, other commodities and foreign currencies. At the time OPEC said plainly what would happen. Oil and other commodities ( not necessarily denominated or linked to the dollar as oil was ) all boomed as the dollar fell , inflation went up and Gerry Ford wanted us all to wear WIN buttons. I am NOT making this up. It's all there in the history books. Historically , a weak dollar causes money to flow into more tangible things like gold, real estate (both of which boomed in the 1970's like real estate is doing now ), other currencies ( like Swiss Francs ) and oil. A strong dollar causes people to put their money elsewhere to maximize return on same.

    You actually piqued my curiosity about the REAL GDP numbers. I got the 1.6% figure for average GDP from 1973 to 1982 from a research piece from Paul Sperry at heritage.org. He got the number by citing to Robert Bartley's book "The Seven Fat Years" ( pg. 6 ). Bartley claimed to get his numbers from the Bureau of Economic Analysis. Prompted by your number ( which is wrong btw ) I did the math and got an annual GDP rate for that period of 2.185% using just the BEA numbers. About half a percentage point above the Sperry/Bartley number. Still a lousy number and both the '64 to '72 and '83 to 90 average GDP's were much better.( roughly 3.5 % ) So were Clinton's btw especially in his Second Term. In any event, I did some additional searches for GDP rate and got varying numbers at several other sites like thebalance.com. All CLAIMING to be citing numbers from the Bureau Of Economic Analysis. The differences were not wild or glaring but there was variance. So I double checked the numbers straight from the BEA against the long and probably boring list that I posted. THOSE numbers are correct at least as far as the BEA is concerned and the annual average for 1973 to 1982 in REAL terms ( inflation adjusted ) is 2.185%. Where Sperry citing Bartley got 1.6% , I couldn't tell you. I do know that there are international agencies that publish these sorts of numbers ( like the World Bank ) and some private think tanks publish their own numbers ( like the Rand Corporation ) and some , repeat SOME of their numbers vary from the BEA. Btw, from where did you get your number of 2.85 % ? Not trying to pick a fight. Just curious.

    Btw, while it appears one of his numbers MIGHT be shaky, Robert Bartley's book " The Seven Fat Years " is an otherwise excellent work of economic history. The late Mr. Bartley was a member of the famous "Michael's 1 " club. The economic version of the Algonquin Roundtable named after a famous Downtown Manhattan restaurant. Yes, I've dined there. Several times. Among other things, he ( together with Arthur Laffer ) gently but determinedly partially debunked one of Milton Friedman's pet monetarist theories - that slow and steady growth in M1 is the key to stable and non-inflationary growth. While trying to avoid getting lost in the weeds , suffice to say that Friedman got left at least a step behind by not taking proper note of M2 and M3. There is clearly more to the monetary supply than just bank deposits and Interest paid by the Fed on bank deposits. Things like credit cards , home equity loans and commercial credit just to name a few. Now a few are arguing for M4 to include crypto currencies. Arthur Laffer's work in analyzing this area is excellent.

    As for the growth rate for the first six months of THIS year, if you disagree with the BEA number, please take it up with them. I got the number straight from them.

    As to your last two points let me answer with a question : Who do you think was a better steward of our economy ; Clinton or Obama ? I think that we ought to bring this digression to a close and veer back to the original topic and related matters. Just a suggestion.
    Last edited by Eric Stoner; 09-15-2021 at 11:56 AM.
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    I am taking a dive on your first two points to avoid getting too political.

    You claim an exclusive on "reality " but then seem to blithely ignore all the lessons from economic history. You give yourself away with phrases like " giving businesses and the wealthy more money " What do you mean "giving " ? Who is giving what to whom ? I advocate letting EVERYBODY keep more of their own hard earned money and encouraging them to work, save and invest more with the incentive of letting them keep more of the proceeds. Here is the nub of our fundamental disagreement. You seem to think that growth is function of stimulating demand . I rely on HISTORY to show that demand is a function of supply. When did we have stable LONG TERM economic growth , low unemployment , a strong dollar and low inflation ? Under Reagan and Clinton. Before them , we had those things for a few years under LBJ and before him we have to go all the way back to Coolidge. In any event supply is stimulated by removing tax , regulatory, trade and monetary barriers to production. You seem to think that when demand is lacking ( often by a misreading of the economy in general and various markets in particular ) that the Federal government ought to step in and increase spending. History has shown that such a policy will work . For a while. FDR's policies all ran out of gas. W.W.II came to an end , so did "52-20" , as did the Bush The Dim and Obama policies. You are not wrong when you say that demand focused economic medication works faster than supply side remedies. But what worked far better for much longer were the Reagan - Clinton policies. Long term therapy vs. short term pain relief. Can you point to a single demand side program that gave us long term growth with low inflation ?
    Why do you continue to link the policies of Reagan and Clinton together, when their policies were the exact opposite? Reagan cut taxes and Clinton raised taxes. I even remember Reagan criticizing Clinton's tax increase and predicting it would cause a recession, as did dozens of other Republicans. Like it or not, the economy did much better with the higher taxes in the 90s, than with the lower taxes in the 80s. I know you've said that tax rates were still lower under Clinton, than they were before Reagan cut taxes, but tax rates are meaningless without including deductions and credits. The actual percentage of income Americans were paying in taxes, was higher under Clinton than it was under Jimmy Carter. In 1980, the avg. tax rate was 22.4%. In 1997 it was 23% and in 1999 and 2000, it was 23.1%. Not only was the overall avg. tax rate higher under Clinton than Carter, the avg. tax rate for the wealthy Americans was higher as well. In 1980, the avg. tax rate for the top 20% was 26.9%. In 1996 and 1997, it was 27.7%. In 1999 and 2000, it was 27.8%.

    https://www.taxpolicycenter.org/stat...all-households

    We had unprecedented economic growth and increase in prosperity from the 1930s through the 1970s. When FDR took office in 1933, the unemployment rate was approximately 25%. From 1933 - 1944, the unemployment rate fell from 25% - 1.2%. Every year, from 1933 - 1944, the economy grew and unemployment declined from one year to the next, with the exception of the one year where FDR cut spending and raised taxes. When spending increased again, the economic expansion resumed and unemployment continued to decline, without taxes being cut. There were a few years of high inflation, but most years it was below 4%, before the oil embargo of the 70s. The main reason the economy was bad and we had high inflation in the 1970s, was due to the oil embargo, more than any fiscal policies. The price of oil quadrupled, and this was at a time when the avg. car got 14 mpg.

    Reagan cut taxes in 1982. Over the next ten years, unemployment never got below 5%, and most years it was above 6 or 7 percent. There was nothing extraordinary about economic performance during Reagan's presidency, other than the drop in inflation and gasoline prices. Paul Volcker was most responsible for bringing down inflation, not Reagan, and the price of gas declined, based on supply and demand. There wasn't the demand at the price oil rose to, to sustain that price.

    There was unprecedented economic growth and increase in living standards from the 1930s to the 1970s, mostly driven by govt investment and spending, and consumer demand. In the 1930s, it was public works programs. In the 1940s, it was World War 2. In the 1950s and 60s, it was massive government investment in our aerospace program, infrastructure, the military, and education. Minimum wage laws, the 40 hour work week, collective bargaining rights, and Social Security, resulted in households having a lot more money to spend, which greatly increased consumer demand. Many more Americans could afford houses, cars, appliances, etc.. The GI Bill made it possible for many more Americans to be able to go to college. Before FDR took office, the poverty rate was around 50%. By the 1970s, it had declined to 11 or 12 percent.

    Quote Originally Posted by Eric Stoner View Post
    One of the people he listened to was Arthur Laffer who persuaded him to listen to Rubin and Summers and enact strong dollar policies. Inter alia that gave us lower oil prices ( in 1998 I remember paying less than a dollar for a gallon of regular ) Among other things, lower energy prices functioned as a consumer tax cut along with Clinton's other cuts which is how we got the healthy economy we did in his Second Term . Lower energy costs trickle throughout the economy lowering the costs of lots of other everyday things. Like food and rents. Higher energy costs obviously have the opposite effect. That we are witnessing now. But I digress.
    The price of gas was already low when Clinton took office. In 1992, the avg. price was $1.13 per gallon, The price of gas was low because demand had gone down, due to vehicles being more fuel-efficient and increased supply in the US and around the world.

    Quote Originally Posted by Eric Stoner View Post
    There were a lot of reasons why corporations sat around fat , dumb and happy in 2010 and thereafter rather than invest their surpluses. To explain it I would REALLY have to get political so I'll just remind you who was the President. at the time , what his policies were ( I doubt anyone would call them "pro-business" ) and leave it at that. If you want to accuse me of taking a dive, go ahead. I can take it. Btw, we agree that Bush The Dim ought to have raised taxes to pay for his wars.
    During Obama's first term, taxes were lower than they were when Reagan was in office. Aren't you the one who says low tax rates are "pro-business"?


    Quote Originally Posted by Eric Stoner View Post
    As for oil prices, you seem to forget relatively recent economic history. Prior to Nixon we always had relatively stable , comparatively low oil prices. Under him we had The Arab Oil Embargo and then "oil shocks" under Ford and Carter. Nixon cut the last link between the dollar and gold when he closed the gold "window". As predicted the value of the dollar plunged against oil, gold, other commodities and foreign currencies. At the time OPEC said plainly what would happen. Oil and other commodities ( not necessarily denominated or linked to the dollar as oil was ) all boomed as the dollar fell , inflation went up and Gerry Ford wanted us all to wear WIN buttons. I am NOT making this up. It's all there in the history books. Historically , a weak dollar causes money to flow into more tangible things like gold, real estate (both of which boomed in the 1970's like real estate is doing now ), other currencies ( like Swiss Francs ) and oil. A strong dollar causes people to put their money elsewhere to maximize return on same.
    The massive increase in the price of oil during the 1970s was caused by the Arab oil embargo in 1973, and then by the overthrow of the Shah of Iran, several years later. Economically, there was nothing short-term that could have prevented the price of oil from skyrocketing. Over the long-term, the higher cost of gas, along with new mileage requirements for vehicles, tax credits for making homes more energy efficient, and other measures taken to reduce demand for oil, is what brought the price down, along with increased supply in the US and world-wide.

    Quote Originally Posted by Eric Stoner View Post
    You actually piqued my curiosity about the REAL GDP numbers. I got the 1.6% figure for average GDP from 1973 to 1982 from a research piece from Paul Sperry at heritage.org. He got the number by citing to Robert Bartley's book "The Seven Fat Years" ( pg. 6 ). Bartley claimed to get his numbers from the Bureau of Economic Analysis. Prompted by your number ( which is wrong btw ) I did the math and got an annual GDP rate for that period of 2.185% using just the BEA numbers. About half a percentage point above the Sperry/Bartley number. Still a lousy number and both the '64 to '72 and '83 to 90 average GDP's were much better.( roughly 3.5 % ) So were Clinton's btw especially in his Second Term. In any event, I did some additional searches for GDP rate and got varying numbers at several other sites like thebalance.com. All CLAIMING to be citing numbers from the Bureau Of Economic Analysis. The differences were not wild or glaring but there was variance. So I double checked the numbers straight from the BEA against the long and probably boring list that I posted. THOSE numbers are correct at least as far as the BEA is concerned and the annual average for 1973 to 1982 in REAL terms ( inflation adjusted ) is 2.185%. Where Sperry citing Bartley got 1.6% , I couldn't tell you. I do know that there are international agencies that publish these sorts of numbers ( like the World Bank ) and some private think tanks publish their own numbers ( like the Rand Corporation ) and some , repeat SOME of their numbers vary from the BEA. Btw, from where did you get your number of 2.85 % ? Not trying to pick a fight. Just curious.
    Again, the main cause of the poor economy during the 1970s, was the skyrocketing price of gasoline. After the embargo, the price of gas quadrupled. If that had happened any other time over the past 40 years, you would have seen a major economic downturn as well. No tax policy or monetary policy would have made any difference over the short term. We got hit twice in the 70s, with both the oil embargo, and later the overthrow of the Shah.


    Quote Originally Posted by Eric Stoner View Post
    As for the growth rate for the first six months of THIS year, if you disagree with the BEA number, please take it up with them. I got the number straight from them.
    https://www.bea.gov/news/2021/gross-...ts-2nd-quarter

    Real gross domestic product (GDP) increased at an annual rate of 6.6 percent in the second quarter of 2021 (table 1), according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 6.3 percent.
    Note how their figures are at an annual rate, as opposed to the actual growth rate for that quarter.

    Quote Originally Posted by Eric Stoner View Post
    As to your last two points let me answer with a question : Who do you think was a better steward of our economy ; Clinton or Obama ? I think that we ought to bring this digression to a close and veer back to the original topic and related matters. Just a suggestion.
    It's impossible to say, since they both inherited very different situations. Obama did a good job of preventing the economy from collapsing as a result of the economic and financial crisis. He did a poor job of growing the economy, after averting disaster. His main mistakes were not spending enough on the stimulus, going along with Republican spending cuts after they took control of the House, and spending too much time on the ACA and making it too complicating and taking too long to go into effect. If he did something simpler, that provided most uninsured Americans with health insurance right away, it would have been a lot more popular and the Democrats probably would have done much better in the 2010 elections. Clinton did a good job of growing the economy and balancing the budget, but going along with the Republicans in repealing the Glass–Steagall was a major contributing factor to the 2008 financial crisis.

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    Default Re: Interest rates in the coming months

    I link Clinton and Reagan together just to annoy you lol.
    What was the top marginal tax rate before Reagan's cuts ? 70 %. What was it under Clinton ?
    The Tax Reform Act of 1986 eliminated a lot of deductions and credits and gave us three basic tax rates, the top one being 29%. Under Bush Sr. and Clinton there was never ending process of trying to restore deductions and credits.

    What happened in 1939 to cause a huge drop in unemployment ? W.W. II. THAT is what ended the Great Depression. After the war the U.S. had the largest major INTACT industrial base in the world. The U.K and the U.S.S.R were a distant second and third. You are correct that after W.W. II we had a lot of economic growth. We also had seven major recessions. I asked you to point to a period of stable, LONG TERM economic growth with low unemployment and low inflation using the Demand or Consumption based policies you like so much. We had one under Coolidge and we had 92 months of uninterrupted growth from 1982 to 1990. We also had four years of same under Clinton which really picked up AFTER he cut taxes. Just look at the growth rates for his first 4 years ( Up, down, Up down ) and his Second term ( four straight years of growth at over 4% each and every year .) Aside from the annoyance it gives you, THAT is why I link the two together. The person in common, the guy BOTH Clinton and Reagan listened to was Arthur Laffer. Who btw voted for Clinton. TWICE ! Both Reagan and Clinton listened to Laffer and followed his advice. Clinton even listened to Larry Kudlow when it came to Treasury bond policy. And we all reaped the benefits of his doing so in his Second Term. To show you how germane all this economic stuff truly is ; I have lost count of how many DANCERS I knew who worked under Clinton and Bush Jr. They ALL said the SAME thing : they made MORE money when Clinton was POTUS than under Bush.

    Your reliance on the Arab Oil Embargo to explain the economic ills of the 1970's is very incomplete. First of all I ( me , this guy ) was around at the time and had just finished Driver's Ed. and was anxiously awaiting my 17th birthday so I could start driving without a licensed adult in my car. I even had my first car : A beautiful , gas guzzling '67 Le Mans convertible with a factory 8 cylinder engine. Sigh. Yeah. I am that old. But hey it's just a number, right ? RIGHT ? lol
    To understand what happened in the 1970's we have to go back to before the Great Depression when we used to be on the gold standard. Did you know that back in the 1800's many banks issued their own paper money ? They were allowed to issue gold and silver certificates. Rather than carry around hundreds of pounds of gold and silver coins , people used certificates. You could take them to any bank and redeem them for gold and /or silver depending. We also had gold Double Eagles and plenty of silver dollars. Back then we didn't have recessions or depressions. We had "Panics". We had one under Grant ; one under Cleveland and even one under Teddy Roosevelt. Back then the big fight was over using the Gold Standard or using silver to provide more and cheaper money. Wilson came along and gave us the Federal Reserve Act to help stabilize and regulate our banking system. No more private issued gold certificates but the U.S. currency was still redeemable in gold at a set price. The U.S. Treasury became the ONLY legal printer of paper money. They were empowered to issue Federal Reserve Notes backed by "the full faith and credit of the U.S. "; "legal tender for all debts public and private ". How many of those notes they could print was SUPPOSED to be function of how much gold was on deposit. There was not always strict adherence to that standard as the career of Mr. Strong makes clear. God bless him. Had his principles been followed in 1932 ( as Warburg and Harrison advocated at The Fed ) we would never have had a Great Depression . But I digress.

    International Trade was done in the good old days using gold. The Federal Reserve Bank of New York eventually had something like 10% of the world's gold reserves in it vaults. Trade debts were literally settled by physically moving gold from one debtor country's section of the vault to the creditor nation's section. Today, it is all done with computers. After W.W. I the U.S. was flush with gold from France and the U.K. paying for weapons and other supplies during the war. During W.W. II the U.K exhausted its gold reserves thus creating the need for Lend Lease to keep them going. France was en route to doing likewise when they surrendered in June 1940 and let the Nazis take control of their domestic gold reserves.

    The Great Depression hit and FDR took the U.S. dollar off the gold standard. Private ownership of gold coins , bars and certificates was made illegal. Americans dutifully turned in their gold holdings. ( It was another 40 years or so before Americans could again own gold coins , bullion and certificates.) Fast forward to the end of W.W. II. To try and prevent the conditions that created the Great Depression ( and slavish adherence to the gold standard by the U.S. and U.K. helped a lot ! ) which in turn led to the rise of Hitler and Japanese militarists and imperialists the Bretton Woods Agreement was devised. Under its provisions countries could present their dollars and trade them for gold at $35 an ounce. Fast forward to the formation of OPEC, all but one of whose original members were Arab states , Venezuela a being non-Arab. By 1973 they were joined by Ecuador , Indonesia and Iran among several others . They had one product. Oil. Its price was denoted in dollars. So long as the dollar was sound and retained its value they had no cause for complaint. Remember the phrase "Sound as a dollar" ? Nixon came along and struggled to pay for both Vietnam and the Great Society programs while getting hit with inflation. He decided to close the "Gold window". The U.S. would no longer adhere to Bretton Woods. The dollar was no longer redeemable in gold at $35 an ounce. Among other things , the world price for gold had been going up way beyond $35 an ounce and Nixon feared a run on gold. That was in 1971. Prior to his announcement the Germans and the Swiss said they would no longer abide by Bretton Woods. The Swiss redeemed $ 50 million dollars into gold and France did likewise with a $191 million redemption. The world price of gold at the time was over $42 an ounce. A fear at the time was that countries could redeem dollars for gold at $35 an ounce and then sell the same ounces on the world market and pocket the difference. In 1973 he broke the last links between gold and the dollar thus letting the dollar float in international markets against other currencies. All countries now had fiat currencies. Except for the Swiss who still linked the Franc to gold. (I know because my mother opened a Swiss bank account in 1971 as an inflation hedge.) While not convertible per se, the Swiss Franc was still backed by large gold reserves and its value was linked to gold. In the present day that is no longer the case but the Franc is still one of the world's soundest currencies. OPEC was NOT happy. Starting in 1971, the dollars used to pay for their oil were now worth less than they had been . A LOT less. The Arab Oil Embargo against the U.S. ( and a few other countries like The Netherlands, Rhodesia and South Africa that all supported Israel ) only lasted from October, 1973 to March, 1974 . An interruption of a few months did not cause a four fold increase ( from $2.90 a barrel to $11.65 ) in the price of oil all by itself. Not with major oil producers like Venezuela , Indonesia, Mexico, Iran and Canada not adhering to the Embargo. Although none were heard to complain about the whopping increase in price. AFTER the Oil Embargo there were further price increases aka "Oil Shocks" when OPEC switched from dollars to gold as payment for its oil ( as they had been threatening to do as far back as 1971 when Nixon did what he did.) Oil was not the only thing going up in price. Worldwide, commodity wholesale prices were going up an average of 10 % a year. Higher energy costs were A factor but not the only one. A weaker dollar played an even larger role. All you have to do is track the increases in M1 and M2 at the time thanks to Arthur Burns and his fellow toadies at the Fed.

    We agree about Mr. Volcker taming inflation. He did it using interest rates. He could have and should have done it by controlling M1 and M2 ( by selling bonds and increasing reserve requirements ) but his policy worked. After a lengthy and painful recession.

    Would you please READ your own links ? The link you posted giving the BEA numbers for GDP measures Quarter vs. Quarter giving the two numbers YOU posted AND a year to date number further down closer to what I posted. There is a slight variance. Btw when YOU came up with 2.85% as a GDP growth rate for 1973 to 1982 was that the product of your own math or did you find it somewhere ? As I posted I did the math and came up with 2.185%

    I agree with you that Obama did a poor job of growing the economy and that repeal of Glass-Steagall was probably a mistake. Not in theory but in practice because nothing replaced it. I blame Bush a lot more than Clinton because all the warning signs were there. He did make an attempt to rein in the careless lending but nothing to control the derivatives. It was folks like Maxine Waters and Barney Frank who kept insisting that Fannie and Freddie were healthy and that high risk lending ought to continue. Greed may be a fact of life but uncontrolled , unrestrained and unregulated greed is a proven danger. It's more amazing that Clinton did it with overwhelming Congressional majorities from BOTH parties ( there were very few dissenters ) AFTER we had already gone through the S & L crisis.
    Last edited by Eric Stoner; 09-17-2021 at 11:44 AM.
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    I link Clinton and Reagan together just to annoy you lol.
    What was the top marginal tax rate before Reagan's cuts ? 70 %. What was it under Clinton ?
    The Tax Reform Act of 1986 eliminated a lot of deductions and credits and gave us three basic tax rates, the top one being 29%. Under Bush Sr. and Clinton there was never ending process of trying to restore deductions and credits.
    Please read this carefully, since I've said this before. Tax rates are meaningless without taking deductions and credits into consideration. If an individual is earning $200,000 a year, what difference does it make if the tax rate is 70% or 39%, if he ends up paying 30% of his income in taxes after calculating all deductions and credits? The percentage of income Americans were paying in taxes, on average, under Clinton, was higher than it was under Jimmy Carter.

    Quote Originally Posted by Eric Stoner View Post
    What happened in 1939 to cause a huge drop in unemployment ? W.W. II. THAT is what ended the Great Depression. After the war the U.S. had the largest major INTACT industrial base in the world. The U.K and the U.S.S.R were a distant second and third. You are correct that after W.W. II we had a lot of economic growth. We also had seven major recessions. I asked you to point to a period of stable, LONG TERM economic growth with low unemployment and low inflation using the Demand or Consumption based policies you like so much. We had one under Coolidge and we had 92 months of uninterrupted growth from 1982 to 1990. We also had four years of same under Clinton which really picked up AFTER he cut taxes. Just look at the growth rates for his first 4 years ( Up, down, Up down ) and his Second term ( four straight years of growth at over 4% each and every year .) Aside from the annoyance it gives you, THAT is why I link the two together. The person in common, the guy BOTH Clinton and Reagan listened to was Arthur Laffer. Who btw voted for Clinton. TWICE ! Both Reagan and Clinton listened to Laffer and followed his advice. Clinton even listened to Larry Kudlow when it came to Treasury bond policy. And we all reaped the benefits of his doing so in his Second Term. To show you how germane all this economic stuff truly is ; I have lost count of how many DANCERS I knew who worked under Clinton and Bush Jr. They ALL said the SAME thing : they made MORE money when Clinton was POTUS than under Bush.
    What happened with government spending during World War 2? Did government spending increase or decrease?

    In terms of what was being paid in taxes, there was little difference before and after Clinton's tax cuts.

    We're not discussing what Arthur Laffer or Larry Kudlow said. We're discussing whether or not lower taxes and lower government spending is always better for the economy. I say it isn't. You say it is. So far the facts support my assertion. We had very strong economic growth when govt increased spending during World War 2. We had stronger economic growth when taxes were higher, in the 1990s and 1960s, than we did in the 1980s and 2000s when taxes were lower. I still have not seen you come up with an explanation for why this is the case, if lower taxes are always better for the economy.

    Quote Originally Posted by Eric Stoner View Post
    Your reliance on the Arab Oil Embargo to explain the economic ills of the 1970's is very incomplete. First of all I ( me , this guy ) was around at the time and had just finished Driver's Ed. and was anxiously awaiting my 17th birthday so I could start driving without a licensed adult in my car. I even had my first car : A beautiful , gas guzzling '67 Le Mans convertible with a factory 8 cylinder engine. Sigh. Yeah. I am that old. But hey it's just a number, right ? RIGHT ? lol
    To understand what happened in the 1970's we have to go back to before the Great Depression when we used to be on the gold standard. Did you know that back in the 1800's many banks issued their own paper money ? They were allowed to issue gold and silver certificates. Rather than carry around hundreds of pounds of gold and silver coins , people used certificates. You could take them to any bank and redeem them for gold and /or silver depending. We also had gold Double Eagles and plenty of silver dollars. Back then we didn't have recessions or depressions. We had "Panics". We had one under Grant ; one under Cleveland and even one under Teddy Roosevelt. Back then the big fight was over using the Gold Standard or using silver to provide more and cheaper money. Wilson came along and gave us the Federal Reserve Act to help stabilize and regulate our banking system. No more private issued gold certificates but the U.S. currency was still redeemable in gold at a set price. The U.S. Treasury became the ONLY legal printer of paper money. They were empowered to issue Federal Reserve Notes backed by "the full faith and credit of the U.S. "; "legal tender for all debts public and private ". How many of those notes they could print was SUPPOSED to be function of how much gold was on deposit. There was not always strict adherence to that standard as the career of Mr. Strong makes clear. God bless him. Had his principles been followed in 1932 ( as Warburg and Harrison advocated at The Fed ) we would never have had a Great Depression . But I digress.

    International Trade was done in the good old days using gold. The Federal Reserve Bank of New York eventually had something like 10% of the world's gold reserves in it vaults. Trade debts were literally settled by physically moving gold from one debtor country's section of the vault to the creditor nation's section. Today, it is all done with computers. After W.W. I the U.S. was flush with gold from France and the U.K. paying for weapons and other supplies during the war. During W.W. II the U.K exhausted its gold reserves thus creating the need for Lend Lease to keep them going. France was en route to doing likewise when they surrendered in June 1940 and let the Nazis take control of their domestic gold reserves.

    The Great Depression hit and FDR took the U.S. dollar off the gold standard. Private ownership of gold coins , bars and certificates was made illegal. Americans dutifully turned in their gold holdings. ( It was another 40 years or so before Americans could again own gold coins , bullion and certificates.) Fast forward to the end of W.W. II. To try and prevent the conditions that created the Great Depression ( and slavish adherence to the gold standard by the U.S. and U.K. helped a lot ! ) which in turn led to the rise of Hitler and Japanese militarists and imperialists the Bretton Woods Agreement was devised. Under its provisions countries could present their dollars and trade them for gold at $35 an ounce. Fast forward to the formation of OPEC, all but one of whose original members were Arab states , Venezuela a being non-Arab. By 1973 they were joined by Ecuador , Indonesia and Iran among several others . They had one product. Oil. Its price was denoted in dollars. So long as the dollar was sound and retained its value they had no cause for complaint. Remember the phrase "Sound as a dollar" ? Nixon came along and struggled to pay for both Vietnam and the Great Society programs while getting hit with inflation. He decided to close the "Gold window". The U.S. would no longer adhere to Bretton Woods. The dollar was no longer redeemable in gold at $35 an ounce. Among other things , the world price for gold had been going up way beyond $35 an ounce and Nixon feared a run on gold. That was in 1971. Prior to his announcement the Germans and the Swiss said they would no longer abide by Bretton Woods. The Swiss redeemed $ 50 million dollars into gold and France did likewise with a $191 million redemption. The world price of gold at the time was over $42 an ounce. A fear at the time was that countries could redeem dollars for gold at $35 an ounce and then sell the same ounces on the world market and pocket the difference. In 1973 he broke the last links between gold and the dollar thus letting the dollar float in international markets against other currencies. All countries now had fiat currencies. Except for the Swiss who still linked the Franc to gold. (I know because my mother opened a Swiss bank account in 1971 as an inflation hedge.) While not convertible per se, the Swiss Franc was still backed by large gold reserves and its value was linked to gold. In the present day that is no longer the case but the Franc is still one of the world's soundest currencies. OPEC was NOT happy. Starting in 1971, the dollars used to pay for their oil were now worth less than they had been . A LOT less. The Arab Oil Embargo against the U.S. ( and a few other countries like The Netherlands, Rhodesia and South Africa that all supported Israel ) only lasted from October, 1973 to March, 1974 . An interruption of a few months did not cause a four fold increase ( from $2.90 a barrel to $11.65 ) in the price of oil all by itself. Not with major oil producers like Venezuela , Indonesia, Mexico, Iran and Canada not adhering to the Embargo. Although none were heard to complain about the whopping increase in price. AFTER the Oil Embargo there were further price increases aka "Oil Shocks" when OPEC switched from dollars to gold as payment for its oil ( as they had been threatening to do as far back as 1971 when Nixon did what he did.) Oil was not the only thing going up in price. Worldwide, commodity wholesale prices were going up an average of 10 % a year. Higher energy costs were A factor but not the only one. A weaker dollar played an even larger role. All you have to do is track the increases in M1 and M2 at the time thanks to Arthur Burns and his fellow toadies at the Fed.
    Winston Churchill said the biggest mistake of his life was going on the gold standard.

    When the price of oil goes up, it affects everything else. Everything that gets transported becomes more costly. Farms use significant amounts of oil for their tractors and other equipment. In the 1970s, 25% of our electricity came from oil powered generators.

    If not being on the gold standard causes oil prices to increase, why did oil prices plummet during the 1980s, even though we weren't on the gold standard?

    We agree about Mr. Volcker taming inflation. He did it using interest rates. He could have and should have done it by controlling M1 and M2 ( by selling bonds and increasing reserve requirements ) but his policy worked. After a lengthy and painful recession.

    Would you please READ your own links ? The link you posted giving the BEA numbers for GDP measures Quarter vs. Quarter giving the two numbers YOU posted AND a year to date number further down closer to what I posted. There is a slight variance. Btw when YOU came up with 2.85% as a GDP growth rate for 1973 to 1982 was that the product of your own math or did you find it somewhere ? As I posted I did the math and came up with 2.185%

    Quote Originally Posted by Eric Stoner View Post
    I agree with you that Obama did a poor job of growing the economy and that repeal of Glass-Steagall was probably a mistake. Not in theory but in practice because nothing replaced it. I blame Bush a lot more than Clinton because all the warning signs were there. He did make an attempt to rein in the careless lending but nothing to control the derivatives. It was folks like Maxine Waters and Barney Frank who kept insisting that Fannie and Freddie were healthy and that high risk lending ought to continue. Greed may be a fact of life but uncontrolled , unrestrained and unregulated greed is a proven danger. It's more amazing that Clinton did it with overwhelming Congressional majorities from BOTH parties ( there were very few dissenters ) AFTER we had already gone through the S & L crisis.
    Yes, repealing was a big mistake.

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Would you please READ your own links ? The link you posted giving the BEA numbers for GDP measures Quarter vs. Quarter giving the two numbers YOU posted AND a year to date number further down closer to what I posted. There is a slight variance. Btw when YOU came up with 2.85% as a GDP growth rate for 1973 to 1982 was that the product of your own math or did you find it somewhere ? As I posted I did the math and came up with 2.185%
    .
    I was being sarcastic. Actually, I didn't notice the minus sign next to the hyphens, so I included the negative numbers as positive.

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    Default Re: Interest rates in the coming months

    Before you post a link would you please READ it first and make sure it says what you want it to say? If you LOOK at YOUR link , the one YOU posted , all it does it give the tax rates for various income groups over the years. Tax rates went up under Clinton. To a top rate of 39.6%. After Bush Sr. had raised it to 35%. After it had been lowered to 29% in 1986 under Reagan. After he had agreed to numerous reductions and eliminations in various deductions and credits. The common theme from Reagan through Clinton was reduced tax avoidance and higher incomes. If someone was making an Adjusted Gross Income of $100,000 and paying taxes at 29% under Reagan and then paid 39.6% under Clinton but on a higher income he was doing as least as well under the latter as with the former. He might even be saving money on tax lawyers and accountants not to mention the costs and expenses of tax shelters. After Clinton cut Capital Gains taxes to 20% in 1997 he might be paying even less. All one need do is LOOK at the GDP numbers for Clinton's 1st term and compare them to his 2d. Four straight years of steady growth of at least 4% with low inflation. I don't know where you got your numbers on % of income paid in taxes but it didn't come from The Tax Policy Center or the BEA. Even assuming you somehow stumbled over the truth and that folks were paying a higher % of their income in taxes under Clinton than under Carter it shows 1. how much time , money and effort was put into tax avoidance and 2. that incomes were much higher under Clinton than Carter. Especially in his 2nd Term . Even if a bigger piece of the income pie was being paid in taxes , it was coming from LARGER pies.

    In W.W. II we were on a war footing. We had full employment including something like 15 to 16 million people in the military ( with about half our current population ). Thanks to rationing and production regulations consumers were very limited in what they could buy. From food to clothing. They couldn't buy a car or a new fridge. They were limited to 2 or 3 gallons of gas a week and 1 pair of new shoes per person per year.. Most of it was done on BORROWED money , roughly 100% of GDP. You are trying to compare economic apples and oranges.

    Leaving aside what Laffer and Kudlow said to Clinton, all one need do is look at what Slick Willy DID. And the results. Which on balance were good for the economy. Among the things done under Clinton was a strong dollar. Thanks mostly to Robert Rubin. We had a weak dollar under Bush The Dumber.

    You are deliberately misreading everything I posted about oil prices. I have NEVER advocated a return to the gold standard. When it has been suggested on this board I have shot it down by explaining all the practical problems with doing so. The amount of gold the Government would have to buy to support the currency at increasing prices ( higher demand + relatively fixed supply = higher prices , Right ? ) being just one difficulty with doing so. After reviewing practical reasons for not doing it , I have mentioned how slavish adherence to a gold standard in the past helped cause 3 major panics in the 1800's, one in the early 20th Century and then the Great Depression. Lastly , I discussed the limited benefits from doing so , especially when compared to the costs and risks. To quote Bill Buckley : " Idealism is fine but as it approaches reality the costs become prohibitive."

    Yes, we had an Arab Oil Embargo in late 1973 into early 1974 and the price of oil went up. You insist on ignoring OPEC's stated position BEFORE the Embargo. Since oil was priced in Dollars and thanks to Nixon's devaluation of the U.S. Dollar in 1971 ( TWO years BEFORE the Embargo ) they were not happy and said so. They ended up getting LESS for their product than before the devaluation. Inter alia , they threatened to insist that all of their oil be paid for in gold, not dollars. AFTER the Embargo ended there were two major price increases from OPEC to try and make up the difference of what they felt had been lost thanks to a weakened dollar and they insisted that OPEC oil be paid for in gold. That was a A reason for the price of gold shooting up from $42 an ounce in 1971 to $455 at the end of 1974 when Ford made it legal once again for Americans to own gold coins, bullion and certificates. Other countries like Germany and Switzerland got hit even harder by the oil price increases than we did (neither produced any domestic oil ). They had increased inflation as we did but at a much lower rate. WHY ? Because the Swiss Franc was backed by gold and the Deutschmark was supported by the Bundesbank while we had a Fed run by Arthur Burns, et al. The value of those two currencies remained relatively stable in relation to and compared the dollar and their inflation rate was much lower. We had another oil shock after the Shah fell ( for which I do not blame Carter btw, it was inevitable thanks to the Shah ) BUT we were already dealing with higher inflation and staring at a recession coming. That was PRIMARILY a result of monetary and fiscal policies being followed at the time. As I have explained previously, Congress LOVED inflation because it resulted in bracket creep and higher revenues and made it easier to pay interest on and redeem the existing debt. It also required higher and higher rates of interest to be paid on fresh issues of Treasury notes , bills and bonds. That resulted in an inverted yield curve ( short term debt had higher interest rates than long term ) which ALWAYS results in a recession. Of course, Mr. Volcker at the Fed did his part by continual raises in the Discount and other short term rates.

    The point of all this is that OPEC and the price of oil did NOT dictate monetary and fiscal policy. Those things did just as much to generate inflation as did the price of oil.

    What I have advocated is a strong and stable currency linked ( not backed , linked ) to either gold or a basket of commodities resulting in slow and steady monetary growth. Secondly we ought to have the Taylor Rule or something like it. So that everyone knows what Fed policy is or ought to be. Under such a system there would be enough flexibility to be able to respond to this or that crisis by increasing liquidity if needed to avert disaster. One of the few times Greenspan hit the bullseye was when he injected liquidity into the monetary system after the Stock Market Crash of October , 1987. He did exactly the right thing , at the right time ,in the right amount. Questions have been raised about the duration but why quibble over an overall success ? On the whole I think he did far too much tinkering and micromanaging. He is directly responsible for the Bush Recession of 1991-2. Which btw, was one of the shortest and shallowest in our history and was almost over before Clinton defeated Bush in 1992.
    Last edited by Eric Stoner; 09-21-2021 at 08:11 AM.
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    Teddy Roosevelt

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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Before you post a link would you please READ it first and make sure it says what you want it to say? If you LOOK at YOUR link , the one YOU posted , all it does it give the tax rates for various income groups over the years. Tax rates went up under Clinton. To a top rate of 39.6%. After Bush Sr. had raised it to 35%. After it had been lowered to 29% in 1986 under Reagan. After he had agreed to numerous reductions and eliminations in various deductions and credits. The common theme from Reagan through Clinton was reduced tax avoidance and higher incomes. If someone was making an Adjusted Gross Income of $100,000 and paying taxes at 29% under Reagan and then paid 39.6% under Clinton but on a higher income he was doing as least as well under the latter as with the former. He might even be saving money on tax lawyers and accountants not to mention the costs and expenses of tax shelters. After Clinton cut Capital Gains taxes to 20% in 1997 he might be paying even less. All one need do is LOOK at the GDP numbers for Clinton's 1st term and compare them to his 2d. Four straight years of steady growth of at least 4% with low inflation. I don't know where you got your numbers on % of income paid in taxes but it didn't come from The Tax Policy Center or the BEA. Even assuming you somehow stumbled over the truth and that folks were paying a higher % of their income in taxes under Clinton than under Carter it shows 1. how much time , money and effort was put into tax avoidance and 2. that incomes were much higher under Clinton than Carter. Especially in his 2nd Term . Even if a bigger piece of the income pie was being paid in taxes , it was coming from LARGER pies.
    My figures are from the Tax Policy Center, who got their figures from the CBO. Column 5 shows the average federal tax rates for all households, which is the same as the total percentage of taxes paid to the government by all households.

    https://www.taxpolicycenter.org/stat...all-households

    From 1979 - 2018, the two years where the highest percentage of income went to taxes were 1999 and 2000, when 23.1% of all household income went to the government. The year the lowest percent of income went to government was 2009, when 17.9% of income did. You insist that the more money that goes to government, the worse it is for the economy. What happens in the real world is much different. You don't want to acknowledge that the economy can do well when taxes are high. Tax deductions aren't the same tax avoidance. The percentage of household income going to government when Reagan was in office was lower than it was when Jimmy Carter was in office. Under Clinton, it was about the same or more, most years. Please correct me if I'm wrong, but it's my understanding that you think that lower taxes are always better than higher taxes, and less government spending is always better than more government spending. My point is that lower taxes doesn't always equal stronger economic growth and lower unemployment, and higher taxes doesn't always equal slower economic growth and higher unemployment. With government spending, historically economic growth has been better when government spending is higher, than when government spending is lower.

    Quote Originally Posted by Eric Stoner View Post
    In W.W. II we were on a war footing. We had full employment including something like 15 to 16 million people in the military ( with about half our current population ). Thanks to rationing and production regulations consumers were very limited in what they could buy. From food to clothing. They couldn't buy a car or a new fridge. They were limited to 2 or 3 gallons of gas a week and 1 pair of new shoes per person per year.. Most of it was done on BORROWED money , roughly 100% of GDP. You are trying to compare economic apples and oranges.
    From 1941 - 1945, the number of men and women serving in the military increased from 1.8 million to 12.2 million.
    https://www.nationalww2museum.org/st...litary-numbers

    The massive government spending led to massive economic growth as well as unemployment falling to approximately 1% in 1942 or 1943, compared to 25% in 1933. If we had increased spending like that in the 1930s, on the military and public works projects, we could have ended the Great Depression 5 - 7 years earlier. If we had built up the most powerful military in the world in the 1930s, perhaps Japan and Germany wouldn't have started another world war, and if they did, we probably could have defeated them much sooner, if we had been much stronger militarily than we were in 1939, when we had approximately 334,000 people in the military. After World War 2, we did maintain the most powerful military in the world, and no country was willing to start a major war with us. One of the reason why we had strong economic growth during Reagan's years was the major increase in defense spending. Our strong military contributed to the collapse of the Soviet Union.

    Quote Originally Posted by Eric Stoner View Post
    Leaving aside what Laffer and Kudlow said to Clinton, all one need do is look at what Slick Willy DID. And the results. Which on balance were good for the economy. Among the things done under Clinton was a strong dollar. Thanks mostly to Robert Rubin. We had a weak dollar under Bush The Dumber.

    You are deliberately misreading everything I posted about oil prices. I have NEVER advocated a return to the gold standard. When it has been suggested on this board I have shot it down by explaining all the practical problems with doing so. The amount of gold the Government would have to buy to support the currency at increasing prices ( higher demand + relatively fixed supply = higher prices , Right ? ) being just one difficulty with doing so. After reviewing practical reasons for not doing it , I have mentioned how slavish adherence to a gold standard in the past helped cause 3 major panics in the 1800's, one in the early 20th Century and then the Great Depression. Lastly , I discussed the limited benefits from doing so , especially when compared to the costs and risks. To quote Bill Buckley : " Idealism is fine but as it approaches reality the costs become prohibitive."

    Yes, we had an Arab Oil Embargo in late 1973 into early 1974 and the price of oil went up. You insist on ignoring OPEC's stated position BEFORE the Embargo. Since oil was priced in Dollars and thanks to Nixon's devaluation of the U.S. Dollar in 1971 ( TWO years BEFORE the Embargo ) they were not happy and said so. They ended up getting LESS for their product than before the devaluation. Inter alia , they threatened to insist that all of their oil be paid for in gold, not dollars. AFTER the Embargo ended there were two major price increases from OPEC to try and make up the difference of what they felt had been lost thanks to a weakened dollar and they insisted that OPEC oil be paid for in gold. That was a A reason for the price of gold shooting up from $42 an ounce in 1971 to $455 at the end of 1974 when Ford made it legal once again for Americans to own gold coins, bullion and certificates. Other countries like Germany and Switzerland got hit even harder by the oil price increases than we did (neither produced any domestic oil ). They had increased inflation as we did but at a much lower rate. WHY ? Because the Swiss Franc was backed by gold and the Deutschmark was supported by the Bundesbank while we had a Fed run by Arthur Burns, et al. The value of those two currencies remained relatively stable in relation to and compared the dollar and their inflation rate was much lower. We had another oil shock after the Shah fell ( for which I do not blame Carter btw, it was inevitable thanks to the Shah ) BUT we were already dealing with higher inflation and staring at a recession coming. That was PRIMARILY a result of monetary and fiscal policies being followed at the time. As I have explained previously, Congress LOVED inflation because it resulted in bracket creep and higher revenues and made it easier to pay interest on and redeem the existing debt. It also required higher and higher rates of interest to be paid on fresh issues of Treasury notes , bills and bonds. That resulted in an inverted yield curve ( short term debt had higher interest rates than long term ) which ALWAYS results in a recession. Of course, Mr. Volcker at the Fed did his part by continual raises in the Discount and other short term rates.

    The point of all this is that OPEC and the price of oil did NOT dictate monetary and fiscal policy. Those things did just as much to generate inflation as did the price of oil.
    Sorry, I misunderstood your post. I thought you were blaming the rise in the price of oil, on going off the gold standard. In West Germany, inflation hit 7% in the 1970s. I'm not sure, but I think there is something in their constitution requiring government to keep inflation low, due to the hyperinflation of the 1920s, and all of the problems it led to. West Germany and Switzerland would have been affected less by the rise in oil prices, because they probably used a lot less oil per-capita than we did. Americans drove big gas-guzzling cars in the 1970s, compared to the rest of the world. We're also a much bigger country, so we use a lot more oil transporting goods than smaller more densely populated countries. It doesn't make a difference that we were producing oil because American oil producers sold their oil at the market price.

    Regardless of the reason why OPEC increased prices, the increase in the price of oil was a major factor in the inflation during the 1970s. At the time, OPEC had much more pricing power, due to there being fewer alternatives, and due to lack of flexibility in demand. 100 million American car owners can't switch from big gas guzzling cars to small fuel-efficient cars overnight. Oil-powered electric generators can't switch to alternative sources overnight either. Short-term, OPEC made a lot of money, but over the long term, it didn't work out well for them. The high price of oil led to Americans buying smaller fuel-efficient vehicles. Power companies switch from oil to coal for powering their generators. Oil production from non-OPEC sources greatly increased. OPEC has lost a lot of market share since the 1970s.



    OPEC could never quadruple the price of oil now, like they did in the 1970s.

    I disagree with you that Congress loves inflation. Congress LOVES getting reelected, and inflation decreases their chances. Democrats have a much better chance of keeping control of Congress if inflation is low in 2022 than if inflation is high.

    Quote Originally Posted by Eric Stoner View Post
    What I have advocated is a strong and stable currency linked ( not backed , linked ) to either gold or a basket of commodities resulting in slow and steady monetary growth. Secondly we ought to have the Taylor Rule or something like it. So that everyone knows what Fed policy is or ought to be. Under such a system there would be enough flexibility to be able to respond to this or that crisis by increasing liquidity if needed to avert disaster. One of the few times Greenspan hit the bullseye was when he injected liquidity into the monetary system after the Stock Market Crash of October , 1987. He did exactly the right thing , at the right time ,in the right amount. Questions have been raised about the duration but why quibble over an overall success ? On the whole I think he did far too much tinkering and micromanaging. He is directly responsible for the Bush Recession of 1991-2. Which btw, was one of the shortest and shallowest in our history and was almost over before Clinton defeated Bush in 1992.
    I advocate what we have now, where the Fed has the power to lower interest rates and increase the money supply during an economic downturn. I believe that was the only thing that prevented an economic collapse during the economic/financial crisis of 2008 and 2009. Congress wasn't willing to do what was necessary to stimulate the economy, so the Fed had to step in.

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    Default Re: Interest rates in the coming months

    We are never going to narrow our differences if we can't at least agree on terminology.
    Tax rate is just that. The rate at which income is taxed. It was higher under Clinton than it was under Reagan and Bush Jr. The percentage of actual accretion to wealth that was actually paid is more difficult to get at thanks to tax shelters and tax avoidance. Income and TAXABLE Income are two different and separate things.

    In any event there is a good chance to prove or disprove your theory that tax rates don't matter . If the Dems get their way the real combined tax rate for the highest earners in states like N.Y. and California will go up to at least 60%. If it does come to pass then the number of wealthy people moving to Florida, Texas , Delaware and other low tax states will become a stampede. The wealthy will NOT pay those rates. They never have and never will. They will shelter and/or offshore as much of their income as possible. Perhaps you can explain how that will be good for the economy ?

    As to W.W. II, BOTH of our numbers (as to the total of all those who served in the military ) are incorrect. Timeline.com says a total of 16 million served. They're wrong. The WSJ in 1945 said that there were 15 million veterans. Also wrong. An analysis in WWII Forums explains the discrepancy. Somebody somewhere double counted draftees and enlistees.
    To get to 16 million it means that 11.2 million served in the Army. That's wrong . It peaked at 8.2 million. Even adding about 1 million in killed, wounded , missing and those discharged during the war for various reasons adds up to 13,277, 307. The answer is that AFTER being drafted many men enlisted in the Army ( including the Army Air Corps - we didn't have an Air Force until 1947 ), Navy, Marines and Coast Guard. Add those enlistments to the number drafted and you get 16 million. Thus the most accurate number is 13,277,307. And that number does not include some 2 million able bodied draft age men who were exempted to do farm work plus large numbers exempted to keep working in coal mines, steel mills , RAILROADS and other industries and occupations ( police, firemen etc. ) deemed essential to the war effort and /or home front.

    As to the economics of W.W. II it is difficult to believe that you would want to return to those days. What do you suggest ? That Biden tell the nation that the Germans bombed Pearl Harbor again ? Your post reminds me of the children's ditty : "If ifs and buts were candies and nuts we'd all have a Merry Christmas." Let's stick to the historical facts instead and note that Isolationism was the dominant mindset at the time and that FDR had to inch us closer and closer to outright war with Germany. Yes, we had full employment and economic growth unseen before. At what price ? The money borrowed to pay for it all had to be paid back AFTER interest had to be paid for 20 years or more. After the war we had a doozy of a recession despite an incredible amount of pent up DEMAND for housing and consumer goods. We demobilized far too quickly bringing back at least 5 million men from overseas in less than one year. We also proceeded to neglect our defenses which led to our Army's lousy performance in the early months of the Korean War.
    We did NOT maintain the strongest military in the world. Far from it. The fact that we had the atomic bomb and the Soviets did not ( until a few years later AFTER stealing it from us ) caused our leaders to let their guard down and neglect our conventional forces. MacArthur lorded over Japan with only 200,000 troops who got fat, dumb and lazy under soft occupation duty. So much so that when they were sent to Korea in July , 1950 most could not handle a routine march and were undersupplied in everything especially ammunition. Two years prior , when the Soviets blockaded Berlin the U.S. , French and British forces were outnumbered by Soviet troops by at least 5 to 1. Some estimates put it even higher. But we digress.

    You want to blame our economic woes of the 1970's on oil prices. I take that into account but also look at monetary and fiscal policy at the time. Germany had and has a strong central bank. Historically they have guarded their economy against runaway inflation. As I posted , both they and the Swiss had to deal with the same Oil shocks that we did, had no domestic cushion of oil and experienced LOWER inflation than we did thanks primarily to their monetary policies. Why do you think that thousands of Americans opened Swiss bank accounts in the 1970's ? Why would they do that if the Franc was just as weak as the U.S. Dollar ?

    If Congress didn't like the corollary benefits of inflation then why did they fight tooth and nail against any and every effort to index tax rates to inflation to avoid "bracket creep " ? Which we finally got under Reagan btw. If they didn't like paying off bonds with cheaper dollars that were worth less year after year then why didn't they do anything about it ? You DO remember the chaos in the bond markets of the late 1970's and early 80's ? What do you think caused that ? If the Dems think as you do then why are they trying to give us as much inflation as possible ? While still the consensus prediction ( that price stabilization will lead to lower inflation ) stays out there, wholesale prices and retail prices keep going up and up.

    Please re-read what I posted about the Fed. I favor slow and steady monetary growth and a strong dollar. Even with a controlling system like the Taylor Rule the Fed would retain the power and ability to respond to a crisis.

    If you look at those periods when we had stable long term economic growth with low inflation you will see that we also had a strong dollar. Those periods may have had lower rates of growth than some boom years but they lasted longer e.g. four straight years under Clinton ( 1997 to 2000 ) ; Reagan- Bush Sr.'s recovery lasted 92 months. Most "boom" times lasted a year or two , at most without a strong dollar.

    And we NEED growth. It is the only possible way to pay for Social Security, Medicare and a lot of other unfunded liabilities. It is the only way to dig ourselves out of our current hole and restore fiscal sanity. Every percentage point of GDP growth increases tax revenues by at least $50 billion per year.

    Japan led the world in economic growth in the 1960's. They cut taxes every year from 1950 to 1974. Tax revenue in 1970 was 16 times greater than what it was in 1950. Germany cut taxes in 1949, 1950, 1951, 1953, 1954, 1955 and 1958. From 1949 to 1963 their economy grew 361% and revenue went up 450%. I know that both had nowhere to go but up after W.W. II. so let's look at Ireland. Between 1986 and 2006 Growth went from Negative 2% to 8 %. Inflation adjusted tax revenue doubled and deficits became surpluses. All from a halving of the corporate tax rate from 25% to 12.5 %. According to you : Tax rates do not matter and do not affect growth. So the foregoing examples are all just amazing coincidences ?
    Last edited by Eric Stoner; 09-24-2021 at 07:57 AM.
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    We are never going to narrow our differences if we can't at least agree on terminology.
    Tax rate is just that. The rate at which income is taxed. It was higher under Clinton than it was under Reagan and Bush Jr. The percentage of actual accretion to wealth that was actually paid is more difficult to get at thanks to tax shelters and tax avoidance. Income and TAXABLE Income are two different and separate things.
    And the rate at which income is taxed is based on both the tax rates and tax deductions and credits. If an individual earns $200,000 and pays $50,000 in taxes, after deductions and credits, his actual tax rate is 25%. We do have record of how much income people declare on their tax forms and we do have record of how much in taxes they paid.

    Quote Originally Posted by Eric Stoner View Post
    In any event there is a good chance to prove or disprove your theory that tax rates don't matter . If the Dems get their way the real combined tax rate for the highest earners in states like N.Y. and California will go up to at least 60%. If it does come to pass then the number of wealthy people moving to Florida, Texas , Delaware and other low tax states will become a stampede. The wealthy will NOT pay those rates. They never have and never will. They will shelter and/or offshore as much of their income as possible. Perhaps you can explain how that will be good for the economy ?
    You're making stuff up. If Dems get their way, taxes will not be anywhere near 60% for anyone. Trump passed massive tax increases to wealthy residents in CA and NY, yet there was no mass exodus. You don't understand that most people aren't as obsessed with state tax rates as you are. I remember years back, you said states with high tax rates should expect their sports teams to do poorly, due to highly paid athletes leaving their teams in high tax states to go to teams in low tax states. Since then, CA basketball teams have won four of the last seven NBA titles. Baseball teams from the high tax states of CA, MA, and IL have won seven World Series since 2010.

    Regardless, there's no comparison between states and the US. It's a lot easier for an American to move to a different state than it is for an American to move to another country.

    Quote Originally Posted by Eric Stoner View Post
    As to the economics of W.W. II it is difficult to believe that you would want to return to those days. What do you suggest ? That Biden tell the nation that the Germans bombed Pearl Harbor again ? Your post reminds me of the children's ditty : "If ifs and buts were candies and nuts we'd all have a Merry Christmas." Let's stick to the historical facts instead and note that Isolationism was the dominant mindset at the time and that FDR had to inch us closer and closer to outright war with Germany. Yes, we had full employment and economic growth unseen before. At what price ? The money borrowed to pay for it all had to be paid back AFTER interest had to be paid for 20 years or more. After the war we had a doozy of a recession despite an incredible amount of pent up DEMAND for housing and consumer goods. We demobilized far too quickly bringing back at least 5 million men from overseas in less than one year. We also proceeded to neglect our defenses which led to our Army's lousy performance in the early months of the Korean War.
    Will you stop twisting and distorting what I said? I didn't say Biden should do what we did during World War 2. I said if there was a massive increase in government spending in the 1930s, like we saw in the 1940s, we could have ended the Great Depression 6 or 7 years sooner. It's true there was isolationism in the 1930s, but given the state of the economy, it's possible people would have been okay with an increase in military spending, if it meant more jobs. Even if they weren't okay with it, the money could have been spent on public works projects. It would have worked out the same in bringing unemployment down. World War 2 is clear, indisputable evidence that massive government spending leads to massive economic growth. Before World War 2, US unemployment was around 17 or 18 percent. From 1942 - 1972, the US unemployment rate never exceeded 6.8 percent. As a percentage of GDP, the national debt is higher today than it was when World War 2 ended. That's what "supply-side" economics has done for us.

    Quote Originally Posted by Eric Stoner View Post
    You want to blame our economic woes of the 1970's on oil prices. I take that into account but also look at monetary and fiscal policy at the time. Germany had and has a strong central bank. Historically they have guarded their economy against runaway inflation. As I posted , both they and the Swiss had to deal with the same Oil shocks that we did, had no domestic cushion of oil and experienced LOWER inflation than we did thanks primarily to their monetary policies. Why do you think that thousands of Americans opened Swiss bank accounts in the 1970's ? Why would they do that if the Franc was just as weak as the U.S. Dollar ?
    Without the oil embargo and the Shah of Iran being overthrown, the US economy would not have done as poorly as it did during the 1970s.

    Quote Originally Posted by Eric Stoner View Post
    If Congress didn't like the corollary benefits of inflation then why did they fight tooth and nail against any and every effort to index tax rates to inflation to avoid "bracket creep " ? Which we finally got under Reagan btw. If they didn't like paying off bonds with cheaper dollars that were worth less year after year then why didn't they do anything about it ? You DO remember the chaos in the bond markets of the late 1970's and early 80's ? What do you think caused that ? If the Dems think as you do then why are they trying to give us as much inflation as possible ? While still the consensus prediction ( that price stabilization will lead to lower inflation ) stays out there, wholesale prices and retail prices keep going up and up.
    One has nothing to do with the other, and what do the policies of Congress forty years ago have to do with what Congress is doing today? There's not much Congress can do to increase or decrease inflation. If Congress loves inflation so much, why doesn't Congress give itself control of the money supply, rather than the Fed? What you're saying doesn't make sense. Why would Congress love policies that make its members more likely to be voted out of office?

    Quote Originally Posted by Eric Stoner View Post
    Please re-read what I posted about the Fed. I favor slow and steady monetary growth and a strong dollar. Even with a controlling system like the Taylor Rule the Fed would retain the power and ability to respond to a crisis.
    Which is it? slow and steady monetary growth or the Taylor Rule? Slow and steady growth and a strong dollar does not work when unemployment is high and economic growth is slow.

    Quote Originally Posted by Eric Stoner View Post
    If you look at those periods when we had stable long term economic growth with low inflation you will see that we also had a strong dollar. Those periods may have had lower rates of growth than some boom years but they lasted longer e.g. four straight years under Clinton ( 1997 to 2000 ) ; Reagan- Bush Sr.'s recovery lasted 92 months. Most "boom" times lasted a year or two , at most without a strong dollar.
    You don't understand, a strong dollar is a result of a strong economy, not the other way around.

    Quote Originally Posted by Eric Stoner View Post
    And we NEED growth. It is the only possible way to pay for Social Security, Medicare and a lot of other unfunded liabilities. It is the only way to dig ourselves out of our current hole and restore fiscal sanity. Every percentage point of GDP growth increases tax revenues by at least $50 billion per year.
    and we have stronger economic growth when the dollar is weak and interest rates are low.

    Quote Originally Posted by Eric Stoner View Post
    Japan led the world in economic growth in the 1960's. They cut taxes every year from 1950 to 1974. Tax revenue in 1970 was 16 times greater than what it was in 1950. Germany cut taxes in 1949, 1950, 1951, 1953, 1954, 1955 and 1958. From 1949 to 1963 their economy grew 361% and revenue went up 450%. I know that both had nowhere to go but up after W.W. II. so let's look at Ireland. Between 1986 and 2006 Growth went from Negative 2% to 8 %. Inflation adjusted tax revenue doubled and deficits became surpluses. All from a halving of the corporate tax rate from 25% to 12.5 %. According to you : Tax rates do not matter and do not affect growth. So the foregoing examples are all just amazing coincidences ?
    Will you please stop misrepresenting my position? I did not say tax rates do not matter and do not affect growth. What I said was that low taxes aren't always good and high taxes aren't always bad. You keep insisting that low taxes and low government spending are always better. What happens in the real world supports my position and contradicts yours. Based on one of your previous comments, even you contradict your own position. You've been insisting that tax cuts increase revenue, yet you agree with me that Bush Jr. should have increased taxes to pay for the war with Iraq.

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    Default Re: Interest rates in the coming months

    You obviously have not read the House version of proposed tax increases. Aside from raising corporate taxes from 21 to 28% ( making it one of the highest in the world ) and adding a minimum corporate tax of 15% it raises the top Individual marginal tax rate to 39.6 %. The old Clinton rate. BUT it would also tax Long Term Capital Gains at ordinary income tax rates AND it changes the rules for calculating the basis value for estates and assets changing it from value at time of purchase to value at time of death or disposal. AND with a top Capital Gains rate of 39.6% PLUS a Net Investment Tax of 3.8% the top rate on Capital Gains would end up rising from 20% to 43.4 %.

    I have NOT made up anything and I'd appreciate an apology for such a ridiculous accusation. CNBC reported on September 13, 2021 that the House Bill would cause the top Federal marginal tax rate to rise to 46.4% .Residents of NYC would pay a combined city, state and Federal tax rate of 61.2%. If you don't like their numbers please take it up with CNBC and everyone else who has reported on the same pending bills. There is also a proposed surtax of 3% on earnings over $5 million. The current NYC and NYS tax rate is 14.8% thus the highest earners would pay at least 61.2%. In California it will be 59.7 % ; New Jersey 57.2 % ; Hawaii 57.4 . So far there is no proposed repeal or revision of the current $10,000 cap on the SALT deduction. As you noted , Trump signed the increase that affects high earners in N.Y. and other high tax states the most. Low tax states like Florida and Texas were tired of subsidizing the spendthrift governments in high tax states. Florida has three times the population of NYC and yet the whole state budget is roughly the same as NYC's. O.K. , Florida doesn't have to pay for snow removal or have high heating bills in winter. but they spend a lot more on air conditioning. Pretty much year round. And the Dems in NYS have proposed tax INCREASES on the highest earners.

    First of all, you either don't know or have forgotten 20th Century American History. FDR faced a storm of criticism for the modest increases in the defense budget that he did put through. And for the peacetime draft. And for Lend Lease. Remember "America First " ? As for increased public spending that was tried under both Hoover and FDR with mixed results at best. Rather than continue bantering back and forth let's just agree to disagree about the desirability and efficacy of massive public spending. You are in favor. I am opposed. Let's move on.

    Thanks to the hangover of trying to pay for Vietnam AND the Great Society programs ( NONE of which were eliminated by Nixon btw ) and Fed policy our economy already had plenty of problems BEFORE the oil shocks of 1973 , 1974 and 1979. I ought to know. I lived through all of it.

    Do you know what the Taylor Rule is ? It deals with interest rates vis a vis inflation. I have never liked the rule because I think the Fed should not set interest rates. That should be left to the markets imo. Plus imo the focus on interest rates is misplaced. The Fed ought to tend to its knitting and control the growth of M1,2,3 and 4 with its bond and other purchase policies etc. We get a strong dollar thanks to monetary policy. Partly the responsibility of the Fed and the other part lies with the Treasury. A strong dollar promotes investment. A weak dollar does not . We had exactly what I have argued for : Steady , CONSISTENT , LONG Term economic growth with LOW inflation under Reagan and Clinton. All with a STRONG Dollar. We have had many periods of strong economic growth with a strong dollar. Other countries like the U.K. and Germany also had strong growth with a strong Pound and Deutschmark respectively. If you're right then Zimbabwe ought to have been an economic dynamo instead of the basket case it became. Strong currencies support strong economies and strong economies promote healthy currencies IF monetary growth stays proportional to the growing economy.

    Spendthrift spending by Congress has a LOT to do with inflation. Too many Federal dollars , too many of which are borrowed put upward pressure on interest rates ( Federal treasuries have to compete against other investments ) and those excess dollars drive up the cost of goods , services and especially wages.

    Tax cuts do increase revenue. I've posted the facts on that too many times to count. I've also posted numerous examples of other countries with similar experiences. Ireland turned deficits into surpluses. In the U.S. revenues thanks to the JFK-LBJ cuts went UP; same for Reagan's ; same for Clinton's ; same for Bush Jr.'s and Trump's. We got the deficits that we did and currently have thanks to excessive spending. Bush Jr. tried to fight a war in Afghanistan and Iraq AND support multiple deployments elsewhere AND do nation building AND a host of other things. He was helped by Tom DeLay and other Congressional Republicans who turned normal pork barrel spending into a luau to try and buy perpetual reelection. Bush was dumb enough to go along instead of holding the line on spending and trying to get a temporary surcharge to pay for his wars.
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    You obviously have not read the House version of proposed tax increases. Aside from raising corporate taxes from 21 to 28% ( making it one of the highest in the world ) and adding a minimum corporate tax of 15% it raises the top Individual marginal tax rate to 39.6 %. The old Clinton rate. BUT it would also tax Long Term Capital Gains at ordinary income tax rates AND it changes the rules for calculating the basis value for estates and assets changing it from value at time of purchase to value at time of death or disposal. AND with a top Capital Gains rate of 39.6% PLUD a 3.8% Net Investment Tax of 3.8% the top rate on Capital Gains would end up rising from 20% to 43.4 %.

    I have NOT made up anything and I'd appreciate an apology for such a ridiculous accusation. CNBC reported on September 13, 2021 that the House Bill would cause the top Federal marginal tax rate to rise to 46.4% .Residents of NYC would pay a combined city, state and Federal tax rate of 61.2%. If you don't like their numbers please take it up with CNBC and everyone else who has reported on the same pending bills. There is also a proposed surtax of 3% on earnings over $5 million. The current NYC and NYS tax rate is 14.8% thus the highest earners would pay at least 61.2%. In California it will be 59.7 % ; New Jersey 57.2 % ; Hawaii 57.4 . So far there is no proposed repeal or revision of the current $10,000 cap on the SALT deduction. As you noted , Trump signed the increase that affects high earners in N.Y. and other high tax states the most. Low tax states like Florida and Texas were tired of subsidizing the spendthrift governments in high tax states. Florida has three times the population of NYC and yet the whole state budget is roughly the same as NYC's. O.K. , Florida doesn't have to pay for snow removal or have high heating bills in winter. but they spend a lot more on air conditioning. Pretty much year round. And the Dems in NYS have proposed tax INCREASES on the highest earners.
    If you didn't make it up, then sorry. It would help if you would post your source and link to it. In your first paragraph, you said the House version increases the top tax rate to 39.6%. In your second paragraph, you say it will be raised to 46.4%. Which is it? I've only seen the proposal to increase it to 39.5%, which is why I'm skeptical of the 61%.

    Florida and Texas do not subsidize CA and NY. Both CA and NY pay more in federal taxes per-capita than either Texas or Florida. They also get back a lower percentage of what they pay to the federal government.

    The cost of living in NYC is 2 - 3 times as high as in most of Florida, probably even more in rural areas, so you would expect that their government spending would be a lot higher per capita.

    Quote Originally Posted by Eric Stoner View Post
    First of all, you either don't know or have forgotten 20th Century American History. FDR faced a storm of criticism for the modest increases in the defense budget that he did put through. And for the peacetime draft. And for Lend Lease. Remember "America First " ? As for increased public spending that was tried under both Hoover and FDR with mixed results at best. Rather than continue bantering back and forth let's just agree to disagree about the desirability and efficacy of massive public spending. You are in favor. I am opposed. Let's move on.
    The economy grew at 10% during FDR's first term. How can you say that's "mixed results?" This is the difference between you and me. You base everything on your philosophy. I base everything on the facts. Economic growth of 10% is good by any standard, but because government policies went against your philosophy, you call it "mixed results." You will not acknowledge policies that you disagree with were successful, no matter what the results are.

    Quote Originally Posted by Eric Stoner View Post
    Thanks to the hangover of trying to pay for Vietnam AND the Great Society programs ( NONE of which were eliminated by Nixon btw ) and Fed policy our economy already had plenty of problems BEFORE the oil shocks of 1973 , 1974 and 1979. I ought to know. I lived through all of it.
    From 1942 - 1973, the unemployment rate never exceeded 6.6%. During the years Reagan was in office, the unemployment rate exceeded 6.6% six years out of eight.

    Quote Originally Posted by Eric Stoner View Post
    Do you know what the Taylor Rule is ? It deals with interest rates vis a vis inflation. I have never liked the rule because I think the Fed should not set interest rates. That should be left to the markets imo. Plus imo the focus on interest rates is misplaced. The Fed ought to tend to its knitting and control the growth of M1,2,3 and 4 with its bond and other purchase policies etc. We get a strong dollar thanks to monetary policy. Partly the responsibility of the Fed and the other part lies with the Treasury. A strong dollar promotes investment. A weak dollar does not . We had exactly what I have argued for : Steady , CONSISTENT , LONG Term economic growth with LOW inflation under Reagan and Clinton. All with a STRONG Dollar. We have had many periods of strong economic growth with a strong dollar. Other countries like the U.K. and Germany also had strong growth with a strong Pound and Deutschmark respectively. If you're right then Zimbabwe ought to have been an economic dynamo instead of the basket case it became. Strong currencies support strong economies and strong economies promote healthy currencies IF monetary growth stays proportional to the growing economy.
    You don't seem to understand these basic facts about the economy:

    • US economic growth is mostly driven by consumer spending
    • Low interest rates gives consumers more buying power
    • Business investment is based on current and projected demand for their products, not the strength of the currency
    • Strong currency makes it more expensive for manufacturers to produce products locally, and cheaper to produce products overseas. A strong dollar encourages manufacturers to move overseas. A weak dollar encourages manufactures to move here.


    Zimbabwe does not manufacture products. China does. China has kept their currency low, and has had unprecedented economic growth. The same with Japan in the 1970s. A strong dollar makes sense when the unemployment rate is low and economic growth is strong. It does not make sense when unemployment is high and economic growth is slow.

    Quote Originally Posted by Eric Stoner View Post
    Spendthrift spending by Congress has a LOT to do with inflation. Too many Federal dollars , too many of which are borrowed put upward pressure on interest rates ( Federal treasuries have to compete against other investments ) and those excess dollars drive up the cost of goods , services and especially wages.
    No it doesn't. I'm sorry, but that's wrong. Inflation is caused by excess demand, not excess dollars. According to your reasoning, we should have had massive inflation in 2009 - 2010, when government greatly increased spending and the Fed greatly increased the money supply. You even predicted it. Instead, inflation was close to zero.

    Quote Originally Posted by Eric Stoner View Post
    Tax cuts do increase revenue. I've posted the facts on that too many times to count. I've also posted numerous examples of other countries with similar experiences. Ireland turned deficits into surpluses. In the U.S. revenues thanks to the JFK-LBJ cuts went UP; same for Reagan's ; same for Clinton's ; same for Bush Jr.'s and Trump's. We got the deficits that we did and currently have thanks to excessive spending. Bush Jr. tried to fight a war in Afghanistan and Iraq AND support multiple deployments elsewhere AND do nation building AND a host of other things. He was helped by Tom DeLay and other Congressional Republicans who turned normal pork barrel spending into a luau to try and buy perpetual reelection. Bush was dumb enough to go along instead of holding the line on spending and trying to get a temporary surcharge to pay for his wars.
    No they don't. You tried to show they do, by combining high tax years with low tax years to show revenue increased. Tax revenue growth was much greater in the 1970s and 1990s when taxes were higher, than in the 1980s and 2000s when taxes were lower. This is why we argue endlessly. You will not accept facts that go against your philosophy. In 1981, the year before Reagan's tax cuts, tax revenue was $599 billion. Two years later, in 1983, tax revenue was $600 billion. Adjusted for inflation, that's less than revenue in 1981. In 2000, govt revenue was $2.025 trillion. Bush cut taxes in 2001. Four years into Bush's tax cuts, in 2004, govt revenue was $1.88 trillion.

    https://www.taxpolicycenter.org/stat...outlay-summary
    Last edited by eagle2; 09-28-2021 at 02:48 AM.

  24. #149
    God/dess Eric Stoner's Avatar
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    Default Re: Interest rates in the coming months

    Dear me. Here we go again with me filling in the blanks and listing the facts that you insist on ignoring to push YOUR philosophy.

    First as to the proposed tax increases. The Dems are proposing a top marginal tax rate on INDIVIDUALS of 39.6 % . But there will also be surcharge of 3 % on the highest incomes. And a Net Investment tax of 3.8% Tax treatment of Sub-Chapter S corporations will create a top tax rate of 39.6 plus 3 % and 3.8 % = 46.4 %.

    Some of what you say about state to state comparisons is true. What you ignore is the comparative efficiency of state and local governments in states like Florida and Texas. Just in NYC we have seen a Billion dollars go "poof". It was supposed to go to improve mental health services but we have gotten neither improved services nor any sort of accounting as to where all that money went. DeBlasio's wife hasn't said. That's just one of many examples on both the state and city levels. Maybe lower tax collections incentivize efficiencies.

    The economy was already improving BEFORE FDR took office. It was starting to heal after the Stock Market Crash with increased GDP. Hoover's tax increases sucked money out of the economy. Smoot -Hawley caused an international trade war as other countries retaliated against our tariff increases. Everybody and I mean EVERYBODY with a brain told Hoover NOT to sign it including Coolidge and every prominent economist. Why didn't FDR and the Dems repeal it ? FDR hammered Hoover for signing it during the '32 campaign. In 1934 the Congress gave FDR authority to negotiate reciprocal trade agreements yet it was not until AFTER W.W. II that any serious interest was paid to international trade. It was doubly ironic because historically the Dems were free traders and Republicans were the protectionists. Worst of all the Fed raised interest rates in the face of a few bank failures when they ought to have fulfilled their mandate and rescued those otherwise viable banks. FDR refused to join with Hoover to promote a rescue package for the banks before he was inaugurated in March, 1933 and many failed as they couldn't survive panics and runs on their deposits. FDR came in and we got an alphabet soup of programs that had varying degrees of success. Some areas of the economy began to heal while others like agriculture stayed depressed. We both agree that FDR cut spending in his Second Term. You say that was the SOLE cause of the recession that followed. I point to his tax increases as being equally responsible. We didn't really return to stable growth until the increased defense spending of 1940 and 1941, BEFORE Pearl Harbor.

    What was unemployment when Reagan took office ? And when he left office it was what ? We also had high inflation and interest rates of roughly 20% ! What were they when he left office ? Historically employment or decline in unemployment lags behind other economic indicators in a recovery. First the stock markets go up , which they did. Then GDP increases, which it did. then corporate profits go up , which they did. Then more hiring takes place. In a recession we usually see an inverted yield curve first , then a sell off in the stock markets followed by declining profits and then a rise in unemployment. I've posted the GDP numbers ( supra) for Reagan, Bush Sr. and Clinton. In 1982 we had NEGATIVE growth ( contraction ) of 1.44% followed in 1983 by growth of 7.9 % and then an average growth rate of 4.1% for the following five years. Stable, steady economic growth with low inflation. They are there for all to read. Enough already.

    Japan and China both have export driven economies so of course they want their currencies to be artificially low. Japan has been stagnant for the last 20 years and China has a laundry list of economic problems that are just starting to erupt. If you are right then how did we get stable growth under Reagan and Clinton with a strong dollar ? How did Germany achieve the growth it did with a relatively strong currency ? Why did Britain effectively stagnate from 1945 until the 1980's ? Can the Dollar be too strong ? Yes, of course. It is A reason why I am not crazy about the Taylor Rule. I prefer balance so that our currency is strong but not so much that it makes our exports uncompetitive. It's also why I believe in free and FAIR trade. Who got the Chinese to clean up their act ? At least in part. Who was feared ? Who got revisions to NAFTA ? Yeah, "You Know Who ". Until him we had a string of Presidents from Bush Sr. through Clinton, Bush Jr. and Obama who were suckers and patsies where China was concerned. Especially when it came to outright thievery of our technology and intellectual property.

    I don't know where you studied economics and whose books you read or didn't read but the classic definition of "inflation " is too much money chasing too few goods. It can also be too many dollars chasing too few workers causing wages to go up. I have never seen any economist of note or repute say inflation is caused by excess demand. Only you. There is an entire school of classic economics that agrees with me and disagrees with you. The colleges, business schools , think tanks and the financial industry are full of adherents to same . According to you , they are all wrong and you are right. Rather than argue further let's just agree to disagree and move on. I got you. Forget about the money supply and monetary velocity. Forget about government spending at least as far as any effect on inflation is concerned. Demand is all that counts. Supply side economics doesn't work yada yada etc. etc. I 'll have to ignore a LOT of economic history both here and in other countries but You're right, I'm wrong. Enough already.

    Your last point perfectly illustrates the perverse way you use statistics. In 1983 Reagan's tax cuts had not even been fully implemented as I am now pointing out for the THIRD and LAST time. We were just starting to come out of our worst recession in over 40 years so of course tax revenues which depend on INCOMES and PROFITS had not gone up to any appreciable degree. In the early 80's I did a lot of work with major construction companies . They were ALL in trouble to some extent. Even global monsters like Tishman and Turner. Why ? They had to borrow at double digit interest rates ; pay higher and higher wages; higher and higher insurance premiums; higher and higher fuel and supply costs. NOBODY was making any serious PROFITS until 1984 the earliest. That's when their PROFITS started going up so their taxes went up. For years prior they didn't pay any income taxes. Before it can be taxed somebody has to make the money. Get the salary. Get paid the bonus. Make the profit. Then pay the taxes. I am posting this obvious little factoid for at least the fifth time . Enough already.
    Last edited by Eric Stoner; 09-29-2021 at 09:34 AM.
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  25. #150
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    Default Re: Interest rates in the coming months

    Quote Originally Posted by Eric Stoner View Post
    Dear me. Here we go again with me filling in the blanks and listing the facts that you insist on ignoring to push YOUR philosophy.

    First as to the proposed tax increases. The Dems are proposing a top marginal tax rate on INDIVIDUALS of 39.6 % . But there will also be surcharge of 3 % on the highest incomes. And a Net Investment tax of 3.8% Tax treatment of Sub-Chapter S corporations will create a top tax rate of 39.6 plus 3 % and 3.8 % = 46.4 %.
    An investment tax is not a tax on income.

    Quote Originally Posted by Eric Stoner View Post
    Some of what you say about state to state comparisons is true. What you ignore is the comparative efficiency of state and local governments in states like Florida and Texas. Just in NYC we have seen a Billion dollars go "poof". It was supposed to go to improve mental health services but we have gotten neither improved services nor any sort of accounting as to where all that money went. DeBlasio's wife hasn't said. That's just one of many examples on both the state and city levels. Maybe lower tax collections incentivize efficiencies.
    As in efficiency in getting people vaccinated against covid, or dealing with a winter freeze?

    Quote Originally Posted by Eric Stoner View Post
    The economy was already improving BEFORE FDR took office. It was starting to heal after the Stock Market Crash with increased GDP. Hoover's tax increases sucked money out of the economy. Smoot -Hawley caused an international trade war as other countries retaliated against our tariff increases. Everybody and I mean EVERYBODY with a brain told Hoover NOT to sign it including Coolidge and every prominent economist. Why didn't FDR and the Dems repeal it ? FDR hammered Hoover for signing it during the '32 campaign. In 1934 the Congress gave FDR authority to negotiate reciprocal trade agreements yet it was not until AFTER W.W. II that any serious interest was paid to international trade. It was doubly ironic because historically the Dems were free traders and Republicans were the protectionists. Worst of all the Fed raised interest rates in the face of a few bank failures when they ought to have fulfilled their mandate and rescued those otherwise viable banks. FDR refused to join with Hoover to promote a rescue package for the banks before he was inaugurated in March, 1933 and many failed as they couldn't survive panics and runs on their deposits. FDR came in and we got an alphabet soup of programs that had varying degrees of success. Some areas of the economy began to heal while others like agriculture stayed depressed. We both agree that FDR cut spending in his Second Term. You say that was the SOLE cause of the recession that followed. I point to his tax increases as being equally responsible. We didn't really return to stable growth until the increased defense spending of 1940 and 1941, BEFORE Pearl Harbor.
    The economy WAS NOT improving BEFORE FDR took office, it was getting worse.

    https://www.thebalance.com/us-gdp-by-year-3305543

    GDP growth 1930: -8.5%
    GDP growth 1931: -6.4%
    GDP growth 1932: -12.9%

    FDR takes office

    GDP growth 1933: -1.2%
    GDP growth 1934: 10.8%
    GDP growth 1935: 8.9%
    GDP growth 1936: 12.9%

    If tax increases were equally responsible for the slowdown in economic growth during FDR's second term, why is it that economic growth resumed after government spending increased, without cutting taxes back to where they were before the increase?

    Quote Originally Posted by Eric Stoner View Post
    What was unemployment when Reagan took office ? And when he left office it was what ? We also had high inflation and interest rates of roughly 20% ! What were they when he left office ? Historically employment or decline in unemployment lags behind other economic indicators in a recovery. First the stock markets go up , which they did. Then GDP increases, which it did. then corporate profits go up , which they did. Then more hiring takes place. In a recession we usually see an inverted yield curve first , then a sell off in the stock markets followed by declining profits and then a rise in unemployment. I've posted the GDP numbers ( supra) for Reagan, Bush Sr. and Clinton. In 1982 we had NEGATIVE growth ( contraction ) of 1.44% followed in 1983 by growth of 7.9 % and then an average growth rate of 4.1% for the following five years. Stable, steady economic growth with low inflation. They are there for all to read. Enough already.
    The unemployment rate was 7.2% in 1980. In 1989 it was 5.4%. Two years later, in 1991, it was at 7.3%. Again, from 1942 - 1973, the unemployment rate never exceeded 6.6%. In addition, by 1991, our national debt had increased from less than $1 trillion when Reagan took office, to $3.665 trillion. From 1776 - 1980 (204 years), our country ran up approximately $900 billion in debt. Reagan quadrupled this in 10 years.

    Reagan had nothing to do with the interest rates. Paul Volcker is the one who increased them to close to 20% to stop inflation, and he decreased them over the following 7 years. The main reasons for the strong economic growth during Reagan's two terms were the falling interest rates and gas prices, not the tax cuts. Economic growth was just as strong after Clinton raised taxes.

    Quote Originally Posted by Eric Stoner View Post
    Japan and China both have export driven economies so of course they want their currencies to be artificially low. Japan has been stagnant for the last 20 years and China has a laundry list of economic problems that are just starting to erupt. If you are right then how did we get stable growth under Reagan and Clinton with a strong dollar ? How did Germany achieve the growth it did with a relatively strong currency ? Why did Britain effectively stagnate from 1945 until the 1980's ? Can the Dollar be too strong ? Yes, of course. It is A reason why I am not crazy about the Taylor Rule. I prefer balance so that our currency is strong but so much that it makes our exports uncompetitive. It's also why I believe in free and FAIR trade. Who got the Chinese to clean up their act ? At least in part. Who was feared ? Who got revisions to NAFTA ? Yeah, "You Know Who ". Until him we had a string of Presidents from Bush Sr. through Clinton, Bush Jr. and Obama who were suckers and patsies where China was concerned. Especially when it came to outright thievery of our technology and intellectual property.
    Japan's unemployment rate is at 3%, and was at 2.4% in 2019, before the pandemic hit. Our trade deficit with China increased from 2017 to 2019.

    Quote Originally Posted by Eric Stoner View Post
    I don't know where you studied economics and whose books you read or didn't read but the classic definition of "inflation " is too much money chasing too few goods. It can also be too many dollars chasing too few workers causing wages to go up. I have never seen any economist of note or repute say inflation is caused by excess demand. Only you. There is an entire school of classic economics that agrees with me and disagrees with you. The colleges, business schools , think tanks and the financial industry are full of adherents to same . According to you , they are all wrong and you are right. Rather than argue further let's just agree to disagree and move on. I got you. Forget about the money supply and monetary velocity. Forget about government spending at least as far as any effect on inflation is concerned. Demand is all that counts. Supply side economics doesn't work yada yada etc. etc. I 'll have to ignore a LOT of economic history both here and in other countries but You're right, I'm wrong. Enough already.
    https://www.investopedia.com/ask/ans...ne-gain-it.asp

    Inflation is a measure of the rate of rising prices of goods and services in an economy. If inflation is occurring, leading to higher prices for basic necessities such as food, it can have a negative impact on society.

    KEY TAKEAWAYS
    • Inflation is a measure of the rate of rising prices of goods and services in an economy.
    • Inflation can occur when prices rise due to increases in production costs, such as raw materials and wages.
    • A surge in demand for products and services can cause inflation as consumers are willing to pay more for the product.
      Some companies reap the rewards of inflation if they can charge more for their products as a result of the high demand for their goods.

    This is all very basic economics. Inflation is caused by an increase in demand, a decrease in supply, or some combination of the two. If the Fed increases the money supply, which results in lower interest rates and increases demand, inflation will occur, but the inflation is caused by the increase in demand, not the increase in the money supply. If the Fed increases the money supply, but consumers and businesses don't increase spending, then inflation will not occur.

    Quote Originally Posted by Eric Stoner View Post
    Your last point perfectly illustrates the perverse way you use statistics. In 1983 Reagan's tax cuts had not even been fully implemented as I am now pointing out for the THIRD and LAST time. We were just starting to come out of our worst recession in over 40 years so of course tax revenues which depend on INCOMES and PROFITS had not gone up to any appreciable degree. In the early 80's I did a lot of work with major construction companies . They were ALL in trouble to some extent. Even global monsters like Tishman and Turner. Why ? They had to borrow at double digit interest rates ; pay higher and higher wages; higher and higher insurance premiums; higher and higher fuel and supply costs. NOBODY was making any serious PROFITS until 1984 the earliest. That's when their PROFITS started going up so their taxes went up. For years prior they didn't pay any income taxes. Before it can be taxed somebody has to make the money. Get the salary. Get paid the bonus. Make the profit. Then pay the taxes. I am posting this obvious little factoid for at least the fifth time . Enough already.
    No, by 1983 tax revenue had declined so much that Congress passed tax increases. In terms of the average percentage of income paid in federal income taxes, in 1983 taxes were at their lowest level during Reagan's presidency.

    https://www.taxpolicycenter.org/stat...all-households

    In 1983, the average percentage of income paid in federal taxes was 20.5%. In 1984 it was 20.8%, and increased every year after that during his presidency.
    Last edited by eagle2; 09-28-2021 at 01:09 PM.

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