"Stuart Fields" wrote in message
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"Ed Huntress" wrote in message
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"Stuart Fields" wrote in message
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"Ed Huntress" wrote in message
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"John R. Carroll" wrote in message
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"Ed Huntress" wrote in message
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"Stuart Fields" wrote in message
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I wonder why this hasn't hit some of the news channels. I know that
I have not seen this before.
http://www.worldnetdaily.com/index.p...w&pageId=88218
If the Republicans hadn't gutted money for the states from the House
version of the stimulus bill, the 10th Amendment issue would die in a
hurry.
Don't be surprised to see those funds restored to the conferenced
version of the bill Ed.
What I don't understand is why the bill doesn't contain payroll tax
abatement provisions. That could be accomplished with the stroke of a
pen and would be as quick a stimulous as you could get. Republicans
would have been hoist on their own petard, and they'd have been
falling all over themselves to get behind the bill.
Oh, you underestimate their creativity. I'm sure they'd find something
to bitch about no matter what was or was not in the bill.
To them, this is about trying to score political points, not about
helping the country to recover. If you listen to Limbaugh, that's
exactly what the hard-core wants: failure.
And I'm thoroughly disgusted with McCain's grandstanding and sleazy
manuevering. He had it right the first time, when he said that his
understanding of economics is not one of his strong points.
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Ed Huntress
Ed: I sure didn't vote for McCain but I do share his apparent lack of
understanding of economics (I did get a big fat A in engineering
economics though) but how does decreasing income (tax breaks) and
increasing spending (in spite of an existing and growing large debt)
help our economy? If this is a workable method shouldn't people who
recently lost their jobs(decreasing income)go buy more with their credit
cards(increased spending)? The only difference that I can see is that
the Government can print more money and control the value of the debt.
That's the question of the hour, Stu. I assume you're not asking for my
opinion on it, which is like dust in the wind, anyway, but rather what
the administration's thinking is on their stimulus program. The most
compact answer I could give, of which it will require your considerable
analytical skills to recognize its full implications, is this:
Debt, at the national scale, is a small problem. An inability to PAY for
that debt, without destructive messing around with the currency, is a
very large problem, especially when you're in a downward-spiraling
recession.
The growth rates required to stabilize deficit spending and to reduce it
to zero are actually a lot smaller than most people realize. So the
bottom line, to mainstream economists, is to get the growth rate up.
That's the only thing that will get us out of this mess. And the mess
will look less deep and messy if we *do* get growth going again. It
doesn't matter how it grows. What matters is that it *does* grow. And if
we don't get it growing, and quickly, we can kiss our economic ass
goodby. g
That's the theory. Something to keep in mind is that a 1% increase in
growth of the GDP directly increases tax revenues by roughly $50 billion
(at an overall tax rate of 33%, including federal, state, and local).
Likewise, a 1% decline directly increases deficits by a like amount.
There is a compounding effect from growth because you can tax some things
at higher rates when your economy is growing, without slowing down
growth, and also because a growing economy reduces the percentage of debt
represented by a given dollar amount of previously acquired debt, both of
which decrease the debt burden as a percentage of income. It also reduces
the interest rates the Fed has to pay.
And there are many other complications and caveats, which can be argued
six ways to Sunday. They aren't the point: The point is that deficits are
very sensitive to the growth rate of the GDP and to tax rates.
That's what's driving the administrations policies.
--
Ed Huntress
Thanks that makes a bunch of things a bit more understandable. It does
bring up a problem that we are having in our valley. The old adage "If
you ain't growing your dying". Has some very negative unintended
consequences. We are using more water now than is being replenished. Yet
the city fathers are actively trying to get more industry into the area as
well as more people. This water problem, I believe, is going to become an
increasing problem as we continue to "Grow". I can see from the
discussion provided by both you and McDuffee how growth has become an
economic necessity. We appear to be caught up in a giant Ponzy scheme.
Stu
g Well, I wouldn't call it a Ponzi scheme. That would be a case of leaving
future generations with large debts AND a weak economy that can't pay for
them. That's what we're trying to avoid.
But your water problem is real, and there's a more general point to be made
about that, which is that capitalism itself, which structurally and
inherently depends on growth, is again being brought into question. And
you'll be surprised at who is questioning it. It's intellectual
conservatives, not liberals. In certain reaches of intellectual
conservatism, it's believed that the conservative enterprise is inherently
in conflict with capitalism, which they (rightly) identify as a
liberal/progressive enterprise of the 18th century. This has been addressed
in a number of articles in the conservative journals recently.
You can have growth in an economy without growth in population; or even
without growth in the consumption of non-renewable resources; or resources
like your water supply which are renewable, but not at a rate sustainable
with increasing rates of consumption. That's the theory, anyway. Evidence
pointed to is such things as the growth in the electronics industry, the
Internet, and longer-lasting cars. "Green" development of such things as
renewable energy, recycling, and so on also are part of that picture. And
one school of thought is that nearly everything we manufacture really is
just "packaged services," and services have no inherent limits to growth --
at least, until we run out of shoe polish to polish each other's shoes. But
services *do* fulfill some functions previously fulfilled by manufactured
goods, and it's clear that the opportunities for growth there are much
greater than for manufactured goods.
Unfettered development has led to many of our problems, and may be coming to
the end of its days. Expect more planning at all levels, with an eye to
available resources necessary to sustain specific kinds of growth. This
applies more to real estate than to manufacturing. We in the West, even in
the US, don't yet have a population-growth problem. But the world as a whole
has one on the way. Expect to hear more about that over the coming years.
The times they are a' changin.
--
Ed Huntress