Greenspan: Repeal All Bush Tax Cuts

Greenspan was one of the major incompetent movers behind our fiscal mess. I wouldn't take what he says if my life depended on it. The next time I want to see this attention seeking a$$tard in the news is when he is dead - in the obituary section.

To be clear, Greenspan said “I’m in favor of tax cuts, but not with borrowed money.” That implies he is only in favor of repealing the Bush tax cuts because of recent outrageous spending. If I thought that the repeal of the tax cuts wouldn't just lead to even more spending, I'd agree with Greenspan.

How about repealing the government overspending?

It's inevitable given the wave of Boomers about to enter the retired ranks and about to receive Social Security and Medicare.

Just a question of timing.

The economy is very fragile. So first, repeal for those earning over $250 K per Obama's plan.

Then a more broad based tax increase.

Hard to get enthusiastic about this. But it's the only way IMHO.

Yes - some cuts are necessary. But there aren't nearly enough of them to close the gap.

I recall the words of Winston Churchill. "Americans always do the right thing...after they have exhausted all the alternatives."

Riversider has been eerily quiet during these discussions. Must be lonely being left out in the cold, in a "supply-sider" sort of way.

This is a simplified distortion of what Greenspan actually said.

Meltzer at Carnegie Mellon, Rogoff at Harvard, Hubbard at Columbia, all disagree with the failed Keynesian theories that steve supports.

steve likes failure. Weird.

It's inevitable given the wave of Boomers about to enter the retired ranks and about to receive Social Security and Medicare.

Just a question of timing.

The economy is very fragile. So first, repeal for those earning over $250 K per Obama's plan.
------------------

agree, lower the $250k to $125k if needed. Then also add taxes that hit the elderly too so that they contribute to pay up the cost of an aging society. Those would be a consumption tax and a new component on property taxes that goes to SS and Medicare. The elderly have 80% of the assets of the country, those people don't need welfare. So mean test benefits too.

i'd also avoid the "these changes will impact those that are 45 years old or younger". Mean testing has to affect current retirees. The deficit problem generated by the entitlements is hitting NOW, not in 20 years.

Mytwocents is right- increase revenues into government, and politicians will just spend even more. Reducing government spending is the right way to approach this.

"Reducing government spending is the right way to approach this."
Agree.

The deficit problem is not caused by SSI, which has been running a surplus for decades and has an accumulated surplus sufficient to carry it going forward for decades more, or forever if we get the economy back onto a normal growth path.

The immediate deficit is caused by (1) unfunded and pointless wars that politicians knew they could not find political support for, (2) enormous upward wealth transfers to the superrich that reduce effective demand, economic growth, economic stability and tax collections, and (3) a major recession, caused in significant part by the same rise in inequality and the middle class's attempt to deal with its lack of income growth by unsustainable borrowing.

Longer term, there is also the additional problem that our medical sector, already the most expensive and inefficient in the developed world, is growing faster than the economy. Obviously that cannot continue forever, any more than the financial sector's growth can. However, "reducing government spending" misses the point. Replacing the relatively efficient Medicare system with a less efficient private system would make the problem even worse.

Our military action in Afghanistan after 9-11 was "pointless"?? Views like that from financeguy are so unintelligent and naive that I question his judgment on just about anything.

We've reduced government spending on all the people who don't vote or hire lobbyists already. I'm waiting with bated breath which party will propose reducing Social Security or Medicare benefits, and cut military spending. I don't think going bankrupt is a realistic option for the US, especially as we don't have to support our currency. That about concludes realistic options, no? Each of these consume about a third of the budget.
So, Dwell, who's getting the axe? sweet grannies, heroic veterans or Wall Street?
Take your time.

the cost of the aging demographics will be paid in part by the old, the question is whether it's implicit or honest/explicit. most developed countries have the same dilemma. the only ones that talk about it are the usual suspects (nordic countries). netherlands just cut pension spending even though they are in better shape than most... shame on the rest!

the challenge as i see it is to avoid the japanese route. japan put all the burden on the labor market, which developed a 2 tier system with temporary work for every 45 or younger while the old didn't get any pension cut. that's nuts. at some point the gov stops raising more revenue from increasing FICA and just develops a shadow economy and lowers participation rate among the women (going back to 1 income households as the norm, look at germany and japan).

netherlands instead spread the tax base (consumption tax and extra property tax) to make sure that the old with means share the burden as it should be. the good thing about facing the aging societies in tandem is that we will get to see what works and what doesn't. we will learn a lot more from it than if it were happening only in an isolated case.

"Mr. Greenspan is calling for the complete repeal of the 2001 and 2003 tax cuts" = "This is a simplified distortion of what Greenspan actually said."

Hmm. Seems like LICC's delusions run the gamut from "Long Island City is a nice place to live" to "Alan Greenspan didn't actually say what he said."

Kewl.

LICC, what financeguy said was "unfunded and pointless wars"; since you do not question the unfunded part, let's just talk about pointless, shall we?
Pointless can mean 1- having no purpose; purposeless, or 2- unable to effect an aim. I think it's pretty clear that although the war in Afghanistan was justified because the country was harboring the 9/11 masterminds, the manner in which we conducted the attack was extremely stupid. Could we have achieved our security goals better? Who could disagree? On point #2, we have been completely unable to achieve our aim, so that makes this was pointless. Now, as to the Iraqi invasion, my judgment is that it was either treason (putting individual interests above the nation) or unforgivable stupidity. Either way, it doesn't really matter now, we still have to pay for it.

MR. GREGORY:  All right.  Well, Dr. Greenspan, it's not often that you hear Democrats and liberals quoting you.  But, in this case, they did when it come to--came to tax cuts because of an interview you gave recently with Judy Woodruff on Bloomberg television.  Here was the question:  "Tax cuts [that] are due to expire at the end of this year.  Should they be extended?  What should Congress do?" You said, "I should say they should follow the law and then let them lapse." Question:  "So to those interests who say but wait a minute, if you let these taxes go my taxes go up, it's going to depress growth?" You said, "Yes, it probably will, but I think we have no choice in doing that, because we have to recognize there are no solutions which are optimum.  These are choices between bad and worse." You're saying let them all go, let them all lapse?
MR. GREENSPAN:  Look, I'm very much in favor of tax cuts, but not with borrowed money.  And the problem that we've gotten into in recent years is spending programs with borrowed money, tax cuts with borrowed money, and at the end of the day, that proves disastrous.  And my view is I don't think we can play subtle policy here on it.
MR. GREGORY:  You don't agree with Republican leaders who say tax cuts pay for themselves?
MR. GREENSPAN:  They do not.

From Colbert.

Trickle down economics. When fat cats drink beer and poor ppl drink their urine. Trickle down economics.

Columbia, nothing like a in context quote. :)

"Meltzer at Carnegie Mellon, Rogoff at Harvard, Hubbard at Columbia, all disagree with the failed Keynesian theories that steve supports."

Quoting economists does not make your argument stronger. I too can mention economists who support Keynesian economics: Paul Krugman at Princeton, Ben Bernanke at Princeton, Robert Shiller at Yale, Jeffrey Sachs at Columbia.. the list goes on.

and then there is Roubini at NYU... huge Keynesian.

List of Keynesian supporters:

Second Stimulus Too Small

Economist Title
Date Reference
Brad DeLong UC Berkeley- Professor
02/14/09 Blog Post
John Schmitt CEPR- Senior Economist
02/15/09 Op-Ed
Dean Baker CEPR- Co-Director
02/16/09 Op-Ed
James K. Galbraith UT Austin- Professor
02/16/09 Op-Ed
Paul Krugman Nobel Laureate, NYT, Princeton-Professor
02/17/09 CNBC
Heather Boushey CAP- Senior Economist
02/18/09 CNS News
Joseph Stiglitz Nobel Laureate, Columbia University- Professor
02/19/09 Columbia University
Eileen Appelbaum Rutgers- New Brunswick
02/22/09 The Tavis Smiley Show
Michael Meeropol Professor Emeritus of Economics at Western New England College
02/22/09 Radio Commentary
Mark Weisbrot CEPR- Co- Director
02/25/09 Op-Ed
Nouriel Roubini RGE Monitor- Chairman, NYU- Professor
03/05/09 Op-Ed
Robert Solow Nobel Laureate, MIT
03/12/09 BusinessWeek
Mark Thoma University of Oregon- Economist

Need a Third Stimulus

Economist TItle
Date Reference
Heather Boushey CAP- Senior Economist
02/18/09 CNS News
James K. Galbraith UT Austin- Professor
02/25/09 MarketWatch
Martin Feldstein Harvard University- Professor
03/03/09 Op-Ed
Paul Krugman Nobel Laureate, NYT, Princeton,
03/11/09 CNBC
Mark Thoma University of Oregon- Economist 03/16/09 Op-Ed
Dean Baker CEPR- Co-Director
03/17/09 CEPR Paper
Heidi Shierholz EPI- Economist
04/03/09 EPI Jobs Picture
Robert Solow Nobel Laureate, MIT
04/06/09 Gainesville Sun (FL)
Mark Weisbrot CEPR, Co- Director
04/14/09 Op-Ed
Robert Shiller Yale University- Professor
04/15/09 Op-Ed
Gerald Friedman UMass- Amherst- Professor
05/01/09 Dollars&Sense
Lawrence Mishel EPI- President
05/21/09 EPI
Mark Price KRC- Economist
05/31/09 Blog Post
John Schmitt CEPR- Senior Economist
06/08/09 The Hill
Paul Samuelson Nobel Laureate
06/18/09 The Atlantic
Stephanie Kelton University of Missouri- Kansas City- Professor
06/29/09 Blog Post
Stephen Levy CCSE- Senior Economist
07/01/09 New America Media
Pavlina R. Tcherneva Franklin and Marshall College- Professor
07/02/09 Blog Post
Thea Lee AFL-CIO- Economist
07/06/09 The Hill
Laura Tyson Economis Advisor to the President, UC Berkeley- Professor
07/07/09 Bloomberg
Andrew Samwick Dartmouth College- Professor
07/07/09 Blog Post
L. Randall Wray University of Missouri- Kansas City- Professor 07/07/09 Blog Post
Olivier Blanchard IMF- Chief Economist
07/09/09 Financial Times
Justin Wolfers
U Penn- Professor
07/09/09
Marketplace

Nick Perna
Perna Associates- Cheif Economist
07/10/09
WSJ

Robert Reischauer
Urban Institute- President
7/11/09
Washington Post

Nouriel Roubini RGE Monitor- Chairman, NYU- Professor 7/20/2009 CNBC
Mark Zandi Chief Economist, Moody's Economy.com

http://www.cepr.net/index.php/press-releases/interactive-press-releases/economists-who-make-the-third-stimulus-honor-roll/

how many foreclosures does FNM, FRE and FHA have? give them for free to renters on teh sidelines!

there's your stimulus :-)

Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance. More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s. As such, it is a triumph of hope over experience to believe that more government spending will help the U.S. today. To improve the economy, policy makers should focus on reforms that remove impediments to work, saving, investment and production. Lower tax rates and a reduction in the burden of government are the best ways of using fiscal policy to boost growth.

Burton Abrams, Univ. of Delaware
Douglas Adie, Ohio University
Ryan Amacher, Univ. of Texas at Arlington
J.J. Arias, Georgia College & State University
Howard Baetjer, Jr., Towson University
Stacie Beck, Univ. of Delaware
Don Bellante, Univ. of South Florida
James Bennett, George Mason University
Bruce Benson, Florida State University
Sanjai Bhagat, Univ. of Colorado at Boulder
Mark Bils, Univ. of Rochester
Alberto Bisin, New York University
Walter Block, Loyola University New Orleans
Cecil Bohanon, Ball State University
Michele Boldrin, Washington University in St. Louis
Donald Booth, Chapman University
Michael Bordo, Rutgers University
Samuel Bostaph, Univ. of Dallas
Scott Bradford, Brigham Young University
Genevieve Briand, Eastern Washington University
George Brower, Moravian College
James Buchanan, Nobel laureate
Richard Burdekin, Claremont McKenna College
Henry Butler, Northwestern University
William Butos, Trinity College
Peter Calcagno, College of Charleston
Bryan Caplan, George Mason University
Art Carden, Rhodes College
James Cardon, Brigham Young University
Dustin Chambers, Salisbury University
Emily Chamlee-Wright, Beloit College
V.V. Chari, Univ. of Minnesota
Barry Chiswick, Univ. of Illinois at Chicago
Lawrence Cima, John Carroll University
J.R. Clark, Univ. of Tennessee at Chattanooga
Gian Luca Clementi, New York University
R. Morris Coats, Nicholls State University
John Cochran, Metropolitan State College
John Cochrane, Univ. of Chicago
John Cogan, Hoover Institution, Stanford University
John Coleman, Duke University
Boyd Collier, Tarleton State University
Robert Collinge, Univ. of Texas at San Antonio
Lee Coppock, Univ. of Virginia
Mario Crucini, Vanderbilt University
Christopher Culp, Univ. of Chicago
Kirby Cundiff, Northeastern State University
Antony Davies, Duquesne University
John Dawson, Appalachian State University
Clarence Deitsch, Ball State University
Arthur Diamond, Jr., Univ. of Nebraska at Omaha
John Dobra, Univ. of Nevada, Reno
James Dorn, Towson University
Christopher Douglas, Univ. of Michigan, Flint
Floyd Duncan, Virginia Military Institute
Francis Egan, Trinity College
John Egger, Towson University
Kenneth Elzinga, Univ. of Virginia
Paul Evans, Ohio State University
Eugene Fama, Univ. of Chicago
W. Ken Farr, Georgia College & State University
Hartmut Fischer, Univ. of San Francisco
Fred Foldvary, Santa Clara University
Murray Frank, Univ. of Minnesota
Peter Frank, Wingate University
Timothy Fuerst, Bowling Green State University
B. Delworth Gardner, Brigham Young University
John Garen, Univ. of Kentucky
Rick Geddes, Cornell University
Aaron Gellman, Northwestern University
William Gerdes, Clarke College
Michael Gibbs, Univ. of Chicago
Stephan Gohmann, Univ. of Louisville
Rodolfo Gonzalez, San Jose State University
Richard Gordon, Penn State University
Peter Gordon, Univ. of Southern California
Ernie Goss, Creighton University
Paul Gregory, Univ. of Houston
Earl Grinols, Baylor University
Daniel Gropper, Auburn University
R.W. Hafer, Southern Illinois
University, Edwardsville
Arthur Hall, Univ. of Kansas
Steve Hanke, Johns Hopkins
Stephen Happel, Arizona State University
Frank Hefner, College of Charleston
Ronald Heiner, George Mason University
David Henderson, Hoover Institution, Stanford University
Robert Herren, North Dakota State University
Gailen Hite, Columbia University
Steven Horwitz, St. Lawrence University
John Howe, Univ. of Missouri, Columbia
Jeffrey Hummel, San Jose State University
Bruce Hutchinson, Univ. of Tennessee at Chattanooga
Brian Jacobsen, Wisconsin Lutheran College
Jason Johnston, Univ. of Pennsylvania
Boyan Jovanovic, New York University
Jonathan Karpoff, Univ. of Washington
Barry Keating, Univ. of Notre Dame
Naveen Khanna, Michigan State University
Nicholas Kiefer, Cornell University
Daniel Klein, George Mason University
Paul Koch, Univ. of Kansas
Narayana Kocherlakota, Univ. of Minnesota
Marek Kolar, Delta College
Roger Koppl, Fairleigh Dickinson University
Kishore Kulkarni, Metropolitan State College of Denver
Deepak Lal, UCLA
George Langelett, South Dakota State University
James Larriviere, Spring Hill College
Robert Lawson, Auburn University
John Levendis, Loyola University New Orleans
David Levine, Washington University in St. Louis
Peter Lewin, Univ. of Texas at Dallas
Dean Lillard, Cornell University
Zheng Liu, Emory University
Alan Lockard, Binghampton University
Edward Lopez, San Jose State University
John Lunn, Hope College
Glenn MacDonald, Washington
University in St. Louis
Michael Marlow, California
Polytechnic State University
Deryl Martin, Tennessee Tech University
Dale Matcheck, Northwood University
Deirdre McCloskey, Univ. of Illinois, Chicago
John McDermott, Univ. of South Carolina
Joseph McGarrity, Univ. of Central Arkansas
Roger Meiners, Univ. of Texas at Arlington
Allan Meltzer, Carnegie Mellon University
John Merrifield, Univ. of Texas at San Antonio
James Miller III, George Mason University
Jeffrey Miron, Harvard University
Thomas Moeller, Texas Christian University
John Moorhouse, Wake Forest University
Andrea Moro, Vanderbilt University
Andrew Morriss, Univ. of Illinois at Urbana-Champaign
Michael Munger, Duke University
Kevin Murphy, Univ. of Southern California
Richard Muth, Emory University
Charles Nelson, Univ. of Washington
Seth Norton, Wheaton College
Lee Ohanian, Univ. of California, Los Angeles
Lydia Ortega, San Jose State University
Evan Osborne, Wright State University
Randall Parker, East Carolina University
Donald Parsons, George Washington University
Sam Peltzman, Univ. of Chicago
Mark Perry, Univ. of Michigan, Flint
Christopher Phelan, Univ. of Minnesota
Gordon Phillips, Univ. of Maryland
Michael Pippenger, Univ. of Alaska, Fairbanks
Tomasz Piskorski, Columbia University
Brennan Platt, Brigham Young University
Joseph Pomykala, Towson University
William Poole, Univ. of Delaware
Barry Poulson, Univ. of Colorado at Boulder
Benjamin Powell, Suffolk University
Edward Prescott, Nobel laureate
Gary Quinlivan, Saint Vincent College
Reza Ramazani, Saint Michael's College
Adriano Rampini, Duke University
Eric Rasmusen, Indiana University
Mario Rizzo, New York University
Richard Roll, Univ. of California, Los Angeles
Robert Rossana, Wayne State University
James Roumasset, Univ. of Hawaii at Manoa
John Rowe, Univ. of South Florida
Charles Rowley, George Mason University
Juan Rubio-Ramirez, Duke University
Roy Ruffin, Univ. of Houston
Kevin Salyer, Univ. of California, Davis
Pavel Savor, Univ. of Pennsylvania
Ronald Schmidt, Univ. of Rochester
Carlos Seiglie, Rutgers University
William Shughart II, Univ. of Mississippi
Charles Skipton, Univ. of Tampa
James Smith, Western Carolina University
Vernon Smith, Nobel laureate
Lawrence Southwick, Jr., Univ. at Buffalo
Dean Stansel, Florida Gulf Coast University
Houston Stokes, Univ. of Illinois at Chicago
Brian Strow, Western Kentucky University
Shirley Svorny, California State
University, Northridge
John Tatom, Indiana State University
Wade Thomas, State University of New York at Oneonta
Henry Thompson, Auburn University
Alex Tokarev, The King's College
Edward Tower, Duke University
Leo Troy, Rutgers University
David Tuerck, Suffolk University
Charlotte Twight, Boise State University
Kamal Upadhyaya, Univ. of New Haven
Charles Upton, Kent State University
T. Norman Van Cott, Ball State University
Richard Vedder, Ohio University
Richard Wagner, George Mason University
Douglas M. Walker, College of Charleston
Douglas O. Walker, Regent University
Christopher Westley, Jacksonville State University
Lawrence White, Univ. of Missouri at St. Louis
Walter Williams, George Mason University
Doug Wills, Univ. of Washington Tacoma
Dennis Wilson, Western Kentucky University
Gary Wolfram, Hillsdale College
Huizhong Zhou, Western Michigan University
Additional economists who have signed the statement

Lee Adkins, Oklahoma State University
William Albrecht, Univ. of Iowa
Donald Alexander, Western Michigan University
Geoffrey Andron, Austin Community College
Nathan Ashby, Univ. of Texas at El Paso
George Averitt, Purdue North Central University
Charles Baird, California State University, East Bay
Timothy Bastian, Creighton University
Joe Bell, Missouri State University, Springfield
John Bethune, Barton College
Robert Bise, Orange Coast College
Karl Borden, University of Nebraska
Donald Boudreaux, George Mason University
Ivan Brick, Rutgers University
Phil Bryson, Brigham Young University
Richard Burkhauser, Cornell University
Edwin Burton, Univ. of Virginia
Jim Butkiewicz, Univ. of Delaware
Richard Cebula, Armstrong Atlantic State University
Don Chance, Louisiana State University
Robert Chatfield, Univ. of Nevada, Las Vegas
Lloyd Cohen, George Mason University
Peter Colwell, Univ. of Illinois at Urbana-Champaign
Michael Connolly, Univ. of Miami
Jim Couch, Univ. of North Alabama
Eleanor Craig, Univ. of Delaware
Michael Daniels, Columbus State University
A. Edward Day, Univ. of Texas at Dallas
Stephen Dempsey, Univ. of Vermont
Veronique de Rugy, George Mason University
Allan DeSerpa, Arizona State University
William Dewald, Ohio State University
Jeff Dorfman, Univ. of Georgia
Lanny Ebenstein, Univ. of California, Santa Barbara
Michael Erickson, The College of Idaho
Jack Estill, San Jose State University
Dorla Evans, Univ. of Alabama in Huntsville
Frank Falero, California State University, Bakersfield
Daniel Feenberg, National Bureau of Economic Research
Eric Fisher, California Polytechnic State University
Arthur Fleisher, Metropolitan State College of Denver
William Ford, Middle Tennessee State University
Ralph Frasca, Univ. of Dayton
Joseph Giacalone, St. John's University
Adam Gifford, California State Unviersity, Northridge
Otis Gilley, Louisiana Tech University
J. Edward Graham, University of North Carolina at Wilmington
Richard Grant, Lipscomb University
William Green, Sam Houston State University
Kenneth Greene, Binghamton University
Gauri-Shankar Guha, Arkansas State University
Darren Gulla, Univ. of Kentucky
Dennis Halcoussis, California State University, Northridge
Richard Hart, Miami University
James Hartley, Mount Holyoke College
Thomas Hazlett, George Mason University
Scott Hein, Texas Tech University
Bradley Hobbs, Florida Gulf Coast University
John Hoehn, Michigan State University
Matt Holian, San Jose State University
Daniel Houser, George Mason University
Thomas Howard, University of Denver
Chris Hughen, Univ. of Denver
Marcus Ingram, Univ. of Tampa
Joseph Jadlow, Oklahoma State University
Sherry Jarrell, Wake Forest University
Scott Kelly, Albany State University
Carrie Kerekes, Florida Gulf Coast University
Robert Krol, California State University, Northridge
James Kurre, Penn State Erie
Peter Leeson, George Mason University
Tom Lehman, Indiana Wesleyan University
W. Cris Lewis, Utah State University
Stan Liebowitz, Univ. of Texas at Dallas
Anthony Losasso, Univ. of Illinois at Chicago
John Lott, Jr., Univ. of Maryland
Keith Malone, Univ. of North Alabama
Henry Manne, George Mason University
Richard Marcus, Univ. of Wisconsin-Milwaukee
James Barney Marsh, University of Hawaii at Manoa
Timothy Mathews, Kennesaw State University
John Matsusaka, Univ. of Southern California
Thomas Mayor, Univ. of Houston
John McConnell, Purdue University
W. Douglas McMillin, Louisiana State University
Mario Miranda, The Ohio State University
Ed Miseta, Penn State Erie
James Moncur, Univ. of Hawaii at Manoa
Charles Moss, Univ. of Florida
Tim Muris, George Mason University
John Murray, Univ. of Toledo
David Mustard, Univ. of Georgia
Steven Myers, Univ. of Akron
Dhananjay Nanda, University of Miami
Stephen Parente, Univ. of Minnesota
Allen Parkman, Univ. of New Mexico
Douglas Patterson, Virginia Polytechnic Institute and University
Timothy Perri, Appalachian State University
Mark Pingle, Univ. of Nevada, Reno
Ivan Pongracic, Hillsdale College
Robert Prati, East Carolina University
Richard Rawlins, Missouri Southern State University
Thomas Rhee, California State University, Long Beach
Christine Ries, Georgia Institute of Technology
Nancy Roberts, Arizona State University
Larry Ross, Univ. of Alaska Anchorage
Timothy Roth, Univ. of Texas at El Paso
Atulya Sarin, Santa Clara University
Thomas Saving, Texas A&M University
Eric Schansberg, Indiana University Southeast
John Seater, North Carolina University
Alan Shapiro, Univ. of Southern California
Thomas Simmons, Greenfield Community College
W. James Smith, University of Colorado Denver
Frank Spreng, McKendree University
Judith Staley Brenneke, John Carroll University
John E. Stapleford, Eastern University
Courtenay Stone, Ball State University
Avanidhar Subrahmanyam, UCLA
Scott Sumner, Bentley University
Clifford Thies, Shenandoah University
William Trumbull, West Virginia University
A. Sinan Unur, Cornell University
Randall Valentine, Georgia Southwestern State University
Gustavo Ventura, Univ. of Iowa
Marc Weidenmier, Claremont McKenna College
Robert Whaples, Wake Forest University
Gene Wunder, Washburn University
John Zdanowicz, Florida International University
Jerry Zimmerman, Univ. of Rochester
Joseph Zoric, Franciscan University of Steubenville

maly- you don't think we have accomplished any significant goals in Afghanistan?? Really???

> More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s. More government spending did not solve Japan's "lost decade" in the 1990s.

thanks god somebody is saying this!!!! USA needs to figure out in which sectors we are competitive and why our labor costs are not.

the costs and inefficiencies of the health care system shouldn't be shoulder by the labor market, not is the huge cost of aging. wages are not competitive already to put these 2 huge burdens on the labor mkt. there's a need for widening the tax base so that not only wage earners pay for these 2 (i'd say netherland's model is the best, with consumption tax and part of property taxes going towards the basic pension).

USA depends on it's entrepreneurs, it cannot be that they have to spend more time wondering how on earth they provide health care benefits to their employees than on their business. There's a reason we cannot compete with countries that have a national system and countries that already reformed their SS and Medicare.

"How about repealing the government overspending?"

DING DING DING!!!!!

but when most of the overspending comes from entitlements, is it realistic to expect the gov to cut them to current retirees? isn't it more realistic for the current gov to just print money and let the next one deal with high inflation?

i'm asking, really, i have no idea whether it's really the 3rd rail when many retirees are not expecting full benefits as we speak.

for lic:

another quote from Meet the Press. Admiral Mullen on our accomplishments in Afghanistan.

MR. GREGORY: There, there are some who have argued that the fixation about the leak perhaps is a distraction from the larger point of these documents, and that is that it goes in an unvarnished way to the core question of whether the strategy is actually working. The New York Times, as part of its reporting, made this piece of analysis--and I'll put it up on the screen--on Monday: "The documents--some 92,000 reports spanning parts of two administrations from January 2004 through December 2009--illustrate in mosaic detail why, after the United States has spent almost $300 billion on the war in Afghanistan, the Taliban are stronger than at any time since 2001." Don't you think the public gets a look at these documents, and the bigger concern here is, not the leak, but the fact that this war may be a lost cause?
ADM. MULLEN: I don't think that the Taliban being stronger than they've been since 2001 is, is news. I mean, I've been concerned about the growing insurgency there for a number of years.

"isn't it more realistic for the current gov to just print money and let the next one deal with high inflation?"

Not really: I think the entitlement obligations are CPI-indexed. I.e., inflation does not reduce the entitlement burden.

Report from the associated press:
Taliban insurgents are being trained as Real Estate brokers.
The United States commitment to Afghanistan's reform is in excess of 300 billion.
It is clear to the Taliban that the next phase of the conflict will be to tire the US through a series of money draining events. Starting this coming Sunday there will be over 1000 open houses in just a Kabel area alone! The idea is to sell what's left of Afghanistan as a retirement community for Americans who can no longer afford to retire in the US. Abdul Fahari, a local liquior owner said,"every bottle of cheap champagian has been sold out!"

"isn't it more realistic for the current gov to just print money and let the next one deal with high inflation?"

Not really: I think the entitlement obligations are CPI-indexed. I.e., inflation does not reduce the entitlement burden.

in that case they will do again what clinton did, redifine how inflation is measured for COLAs, giving tons of wait to lower housing costs for ex (as high inflation on consumer goods can co exist with decreasing prices for housing, kind of the reverse of what we had during the last 15 years)

"More government spending by Hoover and Roosevelt did not pull the United States economy out of the Great Depression in the 1930s."

Oh really? Well, in case you did not know, what ended the depression was WWII. What do you think WWII was? It was a huge government spending program.

"Notwithstanding reports that all economists are now Keynesians and that we all support a big increase in the burden of government, we do not believe that more government spending is a way to improve economic performance.

Geoffrey Andron, Austin Community College
Thomas Simmons, Greenfield Community College"

HA HA HA HA! Your quoting COMMUNITY COLLEGE "economists" to refute that Keubesian economics don't work. Seriously, I just listed a whole bunch of ivy league professors, and you give me COMMUNITY COLLEGE ones.

I was starting to become a strong supporter of Keynesian economics since it had strong support among economists at Harvard, MIT, Yale, NYU, Princeton, and Columbia. But if Andron at AUstim COMMUNITY says it is a bad idea, then I guess I will just have to listen to him. But before I change my mind for good, I'm still waiting to hear the opinion of the economics dept. at LaGuardia Community College.

anyone hear if they are bringing back the home buyer tax credit ?

Pres, you are looking really bad here. That list has economists from many, many colleges and universities, including the Ivy League.

Notice how you cannot realistically defend your Keynesian views. You want a big government to suck money from others and redistribute. I think that is an awful way to handle an economy and for government to function.

"Notice how you cannot realistically defend your Keynesian views. You want a big government to suck money from others and redistribute."

Oh, I can defend my vews quite well. I just have not been trying that hard. Why don't you answer this question for me: What ended the Depression? Was it deregulation? Was it tax cuts? Was it spending cuts? Tell me, what ended the depression.

From Megan McArdle:

The Great Depression indisputably ended during World War II, which is when the output gap closed. But was it causal? Like everything else about the Great Depression, it's really hard to know.

Christina Romer convincingly argues that it was ultimately monetary expansion, driven by gold flows into the United States, that ended it--but later in the decade, before the turnaround, those gold flows were driven by fears about the war that indeed eventually came. Lend-Lease represented a substantial credit expansion.

There are other non-spending factors. Commodity prices spiked in 1939 due to the war, which was good for the resource-rich American continents. American labor started leaking abroad as foreign labor markets tightened. Undoubtedly a lot of firms who made things that warring Europeans needed saw a dramatic improvement in their optimism. Our figures for the period are rather primitive, so it's harder to measure things like business confidence than it would be now.

One thing that makes the question difficult to answer is that it's hard to know when to date the beginning of the recovery. Matt prefers 1940, but argues that net exports cannot justify this as a result of war spending. (By 1941, I think, you cannot reasonably read US history and conclude that America was not defacto ramping up production for a war) But there had been another nasty recession in 1938, and recovery after recessions is unusually fast. Economies are complicated things. Absent the war, would the economy have grown in 1939 and part of 1940, then sunk back into the doldrums? I don't think we know.

"The Great Depression indisputably ended during World War II,"

So WWII ended the depression? Is that your belief? Well, what do you think WWII was (besides a war)? Let's see, it created thousands of new jobs, both civilian and military. It involved huge government spending and borrowing. It increased regulations. WWII is nothing more than New Deal 2.0. So government spending is what ended WWII and you just agreed to that.

> "The Great Depression indisputably ended during World War II,"

There's no dispute among academics, but many "simplistic" and "easily manipulated" people believe it was FDR (and can tell you that's the case among the "thinkers" i know from the midwest). Thanks god for that! Otherwise Rush Limbaugh and followers will demand USA starts a WWIII so that their home equity goes up.

Educated points of views can be dangerous sometimes on the wrong hands (here's the economic benefits for USA of a war as long as it's located somewhere else and destroys your competitors econ base).

In "Wartime Prosperity? A Reassessment of the U.S. Economy in the 1940s", Robert Higgs argues:

Relying on standard measures of macroeconomic performance, historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded, because it does not recognize that the United States had a command economy during the war. From 1942 to 1946 some macroeconomic performance measures are statistically inaccurate; others are conceptually inappropriate. A better grounded interpretation is that during the war the economy was a huge arsenal in which the well-being of consumers deteriorated. After the war genuine prosperity returned for the first time since 1929.

It's easy to see that a war is simply a special case of deficit spending. Whatever the case is for deficit spending as a cure, war spending is clearly much weaker because the spending is not for productive purposes, but for destructive ones, no matter how justified the war might be.

Doing Nothing
Amazingly, doing nothing often seems to be the correct response. The Depressions of 1907 and 1920 were both over within a year, even though the Federal government did virtually nothing in response.

Pres, I did not agree. I do agree that you have a very simplistic understanding of the situation and of economics.

"The Great Depression indisputably ended during World War II,"

-----------------------

"historians and economists believe that “war prosperity” prevailed in the United States during World War II. This belief is ill-founded"

How do you expect to debate me when the onyl one your debating is yourself. Your contradicting yourself right and left.

Are you trying to say that the statement that the Great Depression ended DURING WWII means that it was ended BY WWII???

> Amazingly, doing nothing often seems to be the correct response. The Depressions of 1907 and 1920 were both over within a year, even though the Federal government did virtually nothing in response.

LIC, don't make the armchair econ mistake of thinking that crashes, inflationary processes, and the like are all the same. you cannot compare 1907 nor 1920 with the crashes brought by the roaring 20s and the biggest housing bubble on history we just had. it's great to go back before the great depression though to analyze booms and crashes. even econ profs from ivy leagues don't do it cause of laziness mostly.

booms and crashes, do rhyme, but not enough to draw conclusions about the optimal public policy. for ex, something very significant that changed is that before booms and busts used to be more frequent and the recovery used to be faster. what changed? in the most recent case IS WAS in part a gov policy made bubble. Before the gov was not htere telling you "be a homeowner!", do this, do that, eat fiber!

the guys at the FED and regulating from congress don't even know there was a bubble, that they played a huge role making it... SCARY thought that these very same guys think they can fix it LOL Gov back in the day did believe in a hands off policy, both during and after the bubble. We are in a nanny state/central planning pseudo capitalism right now.