On Nov 4, 8:13*am, Kurt Ullman wrote:
In article ,
*"Robert Green" wrote:



Tax cuts can stimulate the economy under certain circumstance, but not all
of them. *As Kurt and I have often sparred, was it really tax cuts that
heated up the economy or the creation of an entirely new sector of the
economy, personal computing, that caused the explosive growth that started
in the 80's? * My bet's on the explosive growth of a new economic sector
that created demand for American computing HW, SW and consulting across the
world.

* *I have never suggested that tax cuts were more than a part (an
important part) of what impacted on the economy. A lot of it was related
to computing (although I put more of the econ impact on the
unprecedented productivity increases instead of the creation of a new
sector), as well as Greenspan and incredibly easy money (which came back
to bite us in the long run).

In the period he's talking about, when the Reagan tax cuts went into
effect, Paul Volcker was the FED chairman. And money was not
incredibly easy, it was exactly the opposite. Volcker halted the mad
money growth that had lead to high inflation prior to Reagan taking
office.

No doubt that over the longer term advances in computing played
an important role too. But the effects of Reaganomics was clear
from 1983 on and the PC clearly had nothing to do with it in those
early years. Maybe by the end of Reagan's administration you
could argue that it was having a significant effect and it
certainly had an effect in the 90s.




I have long called the expansion during the
Clinton years the Gates/Greenspan expansion for that very reason.
* * I also point to the nasty little truth about tax cuts.. they ALWAYS
result in more revenue. Clinton passed the changes in Cap Gains taxes in
'97, by the time they were fully phased in, we were in the middle of the
surplus.



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