Bye-Bye Supply-Side!

More importantly, when will condo prices consistently go lower than $1000/sq ft?

The bigger problem is that there shouldn't need to be tax cuts expiring. Flat tax on income.

low flat income tax, more consumtion tax?

steve, first you need to understand supply-side economics before you try commenting on it.

JP78, if they didn't in March of 2009 they never will. You are closer to seeing 1,500 per sq then sub 1,000 per sq.

"first you need to understand supply-side economics before you try commenting on it."

I supposed that's the same advice you'd give to David Stockman and Alan Greenspan?

HAHAHAHA!

I do understand supply-side economics: I understand that it doesn't work, except at the extreme margins. Works wonders in the former Soviet Union, not so great here.

Greenspan didn't repudiate supply-side economics. He said that any tax cut should be paid for by reducing spending. He criticized stimulus spending or tax cuts that are paid for with borrowed money.

Obviously, steve does not understand that of which he speaks.

See my other thread about the failure of Keynesian economics.

LICC, you have a habit of reinterpreting the truth to make it fit your vision of the world, starting with Long Island City as a place to live, and now moving on to economics.

"In an interview on NBC's "Meet the Press," Greenspan expressed his disagreement with the conservative argument that tax cuts essentially pay for themselves by generating revenue and productivity among recipients.

"They do not," said Greenspan."

http://www.huffingtonpost.com/2010/08/01/alan-greenspan-extending_n_666549.html

Mr Greenspan also expressed concern about the limited impact of stimulus measures.

"Our problem is that we have a very distorted economy," he said. Recovery had been limited to "large banks, large businesses and high income individuals."

http://www.telegraph.co.uk/finance/economics/7921353/Alan-Greenspan-warns-that-US-could-be-heading-for-double-dip-recession.html

And David Stockman:

IF there were such a thing as Chapter 11 for politicians, the Republican push to extend the unaffordable Bush tax cuts would amount to a bankruptcy filing. The nation’s public debt — if honestly reckoned to include municipal bonds and the $7 trillion of new deficits baked into the cake through 2015 — will soon reach $18 trillion. That’s a Greece-scale 120 percent of gross domestic product, and fairly screams out for austerity and sacrifice. It is therefore unseemly for the Senate minority leader, Mitch McConnell, to insist that the nation’s wealthiest taxpayers be spared even a three-percentage-point rate increase.

http://www.npr.org/blogs/thetwo-way/2010/08/02/128933945/david-stockman-opposes-extended-bush-tax-cuts-icymi

You're left alone with Ran and Rond Paul, or whatever their names are, and the failure of Keynesian economics as ballyhooed by a professor at NORTHWOOD University. (Yes, THAT Northwood University!)

HAHAHAHA.

ah kuddles...sniff sniff

Thanks for not contradicting anything I said above.

steve's economic plan- keep expanding government borrowing, deficts and debt.

"In an interview on NBC's "Meet the Press," Greenspan expressed his disagreement with the conservative argument that tax cuts essentially pay for themselves by generating revenue and productivity among recipients.

"They do not," said Greenspan."

And Stockman:

"More fundamentally, Mr. McConnell’s stand puts the lie to the Republican pretense that its new monetarist and supply-side doctrines are rooted in its traditional financial philosophy. Republicans used to believe that prosperity depended upon the regular balancing of accounts — in government, in international trade, on the ledgers of central banks and in the financial affairs of private households and businesses, too."

Which of course, as amply shown, is EXACTLY what Bill Clinton did, and what Democrats have done consistently since Truman.

Republicans, since Reagan, have done the opposite.

Doesn't work.

did greenspan make his comments from the next bastion of banking.....charlotte???

The sign that steve knows he lost another argument to me is when he starts making things up and tries to change the subject.

trickle up stimulates nuttin

Which part of "They do not" don't you understand, LICC?

not much to dispute:

these two (and many other) key architects of trickle-down, supply-side economic approaches have conceded failure

that's all...not made up...nothing to do with charlotte

oh....and the aside about how clinton/rubin et al balanced the budget and paid down deficits in a serious way....whatever

"Who's left besides Larry Kudlow?"

Glenn Beck?

I've lost a riversider, have you seen a riversider?

"steve's economic plan- keep expanding government... deficitsand debt."

What do you think tax cuts do???

ah kuddles...sniff, sniff

wbottom, steve will get the charlotte reference as will others, if you don't thats fine too.

My plan isn't to "keep expanding governments" - it's to keep social security, which RS and LICC both want to "privatize," despite the miserable failure it was in Chile, a small country where it theoretically should have been easier to do.

I'm all for smaller government: if the Navy wants to buy a boat, let them hold a dance. LICC could channel Mitch Miller, watch the bouncing ball.

We need spending cuts. How do you think tax increases are going to affect business growth?

Chris Christie and Mitch Daniels have the correct approach.

"How do you think tax increases are going to affect business growth?"

As far as I know, no one is proposing an increase in business taxes. You've already said what you'd "cut," LICC: social security, which isn't even part of the budget.

"Chris Christie and Mitch Daniels have the correct approach."

Are you referring to the same Mitch Daniels who ran Bush's OMB while deficits were skyrocketing?

rranger, i get the charlotte ref--ancient stuff, like the cred of supply-side--as in this thread

From Wikipedia:

"In 2002, Daniels helped discredit a report by Assistant to the President on Economic Policy Lawrence B. Lindsey estimating the cost of Operation Iraqi Freedom at between $100–$200 billion. Daniels called this estimate "too high" and stated that the costs would be between $50–$60 billion."

OOPS! I guess Mitch Daniels also thinks that, accoridng to his math, 1 + 1 = 3

good, then correlate the reference and you get my point.

"As of February 2010, around $704 billion has been spent based on estimates of current expenditure rates, which range from the Congressional Research Service (CRS) estimate of $2 billion per week to $12 billion a month, an estimate by economist Joseph Stiglitz."

http://en.wikipedia.org/wiki/Financial_cost_of_the_Iraq_War

Alpie, that's called a misunderestimation.

I don't think people who misunderestimate should become president.

Notice that Pres has no negative propaganda on Mitch's tenure as governor.

Mitch Miller was a governor? Go figure! They didn't mention it in today's obit.

Seems like Supply-Side Economics is bad for your health, too, as the 15 Top Fat States are almost all Red States with low tax rates:

State / Obesity Rate

Mississippi / 34.4%
Louisiana / 33.0%
Tennessee / 32.3%
Kentucky / 31.5%
Oklahoma / 31.4%
West Virginia / 31.1%
Alabama / 31.0%
Arkansas / 30.5%
Missouri / 30.0%
Michigan / 29.6%
South Dakota / 29.6%
Indiana / 29.5%
South Carolina / 29.4%
North Carolina / 29.3%
Ohio / 28.8%

Whereas the thinnest and healthiest states are almost all Blue States with high tax rates:

Colorado / 18.6%
District of Columbia / 19.7%
Connecticut / 20.6%
Massachusetts / 21.4%
Hawaii / 22.3%
Vermont / 22.8%
Oregon / 23.0%
Montana / 23.2%
New Jersey / 23.3%
Utah / 23.5%
New York / 24.2%
Virginia / 24.2%
Idaho / 24.5%
Minnesota / 24.6%
Rhode Island / 24.6%
Wyoming / 24.6%

Seems like Supply-Side Economics is bad for your health, too!

How do you like that! Not only does supply-side economics make you fat, the happiest people in the world live in "SOCIALIST" countries:

"The fact is good times probably have more to do with the size of your wallet than the size of your trophy shelf. The five happiest countries in the world — Denmark, Finland, Norway, Sweden and the Netherlands — are all clustered in the same region, and all enjoy high levels of prosperity."

http://www.msnbc.msn.com/id/38449210/ns/travel-destination_travel/

Seems like all them taxes buy you stuff: "One theory why is that they have their basic needs taken care of to a higher degree than other countries. When we look at all the data, those basic needs explain the relationship between income and well-being."

So LICC / (AWOL) Riversider: where's all the evidence that your voodoo economics actually work, and make people better off?

THERE AIN'T NONE.

whoa now stevie..tell it like it is pls...the trickle-uppity wealthy people be much better off

And then there is the paradox that the states that have a net inflow of Federal taxes also have the highest anti-government feelings. At the extreme, you get welfare states like Alaska that have a strong independent/secessionist movement. Meanwhile, in New Jersey, people pay high taxes and work hard so that rednecks in Montana get nice new roads to their militia compounds.

Absolutely true, maly: I say let them secede so they can get back what they really want, segregation (or worse). "The Something for Nothing Crowd," as Keith Olbermann calls them.

I agree.

"Notice that Pres has no negative propaganda on Mitch's tenure as governor."

Oh really? Well, I don't know about you, but this sounds awfulyl like SOCIALIZED MEDICINE!!!

"In 2007, Governor Daniels signed landmark health care legislation, called the Healthy Indiana Plan, that provides 132,000 uninsured Hoosiers with coverage. The plan promotes health screenings, early prevention services, and smoking cessation. It also provides tax credits for small businesses that create qualified wellness and Section 125 plans. The plan was paid for by an increase in the state’s tax on cigarettes."

Riversider, waiting on your comments! You've been forsaken by the Voodoo Economics Set! The only one left on your side is Sarah Palin.

Without naming names or making political charges, the Congressional Budget Office last week issued a report titled "Federal Debt and the Risk of a Fiscal Crisis." The report's dry, measured words paint a painfully bleak picture of the long-run dangers from the current runaway government deficits.

The CBO report points out that the national debt, which was 36 percent of the gross domestic product three years ago, is now projected to be 62 percent of GDP at the end of fiscal year 2010 -- and rising in future years.

Tracing the history of the national debt back to the beginning of the country, the CBO finds that the national debt did not exceed 50 percent of GDP, even when the country was fighting the Civil War, the First World War or any other war except World War II. Moreover, a graph in the CBO report shows the national debt going down sharply after World War II, as the nation began paying off its wartime debt when the war was over.

By contrast, our current national debt is still going up and may end up in "unfamiliar territory," according to the CBO, reaching "unsustainable levels." They spell out the economic consequences -- and it is not a pretty picture.

-Thomas Sowell

But steve says we should keep borrowing and spending!!

"Thomas Sowell was born in North Carolina and grew up in Harlem. As with many others in his neighborhood, Thomas Sowell left home early and did not finish high school."

http://townhall.com/columnists/ThomasSowell

Nobody ever said that deficits didn't matter - EXCEPT DICK CHENEY. The question is, when to fix them. Fixing them now will only make things worse, causing deflation and a further crash as happened in 1938, and in Japan in the 1990's.

- stevejhx, who finished high school, college, and graduate school.

Why don't you print the bios of the people at the CBO who drafted the report?

Nice try steve.

Keynesianism- failed in the 1930s, failed in the 1970s, failed in Japan, failed now. I'm beginning to see why steve likes it so much- failure attracts failure.

Keynesianism - exactly what wasn't tried in the 1930's (balanced budget, remember?), the 1970's (wage and price controls, remember?), Japan (no fiscal stimulus, remember?).

I'm beginning to see why LICC likes supply-side so much - failure (Long Island City) begets failure (supply-side economics).

The only people left on your side, LICC, are Sarah Palin and Michele Bachmann: you're in good company! If you get Levi on your side, it'll be a sealed deal from my perspective.

From Martin Wolf of FT:

“To understand modern Republican thinking on fiscal policy, we need to go back to perhaps the most politically brilliant (albeit economically unconvincing) idea in the history of fiscal policy: supply-side economics. Supply-side economics liberated conservatives from any need to insist on fiscal rectitude and balanced budgets. Supply-side economics said that one could cut taxes and balance budgets, because incentive effects would generate new activity and so higher revenue. The political genius of this idea is evident. Supply-side economics allowed Republicans to promise lower taxes, lower deficits, and, in effect, unchanged spending. It allowed conservatives to ignore deficits and gave an economic justification for lowering taxes on politically important supporters. In this way, the Republicans were transformed from a balanced-budget party to a tax-cutting party.”

1930s- New Deal programs and massive deficit spending. 1970s- government fiscal policies fail to resolve stagflation. Japan- massive fiscal stimulus building bridges to nowhere and other projects.

What bizarro world does steve live in where none of this happened?

Allan Meltzer on Obama's stimulus (February 2009, Newsweek):

Some economists, like Allan Meltzer of Carnegie Mellon, are absolutely sure of the opposite: "I think this is the introduction to a disaster," Meltzer says. "We're going to face a big inflation. Everybody talks about how much we need to do now. But no one talks about how we're going to unwind what we're doing now." Meltzer has been warning for months that the dramatic slashing of interest rates and surge of government spending—increased now by the nearly $1 trillion the stimulus will cost—is going to take the country back to 1970s-style "stagflation." "Keynesian theory is wrong," Meltzer said. "It doesn't work. I was honorary adviser to the Bank of Japan for 16 years. They put in bullet trains to every town and village in Japan. They paved over every piece of unpaved land. But it was only when they got around to easing their monetary policy that things started to improve."

Actually that didn't work too well either for the Japanese, who are still dragging.

Some experts argue the United States needs more fiscal stimulus to sustain the tepid economic recovery. Harvard economist Ken Rogoff isn’t one of them.

“As it becomes increasingly evident that the recovery will remain subdued in Europe and the U.S., there is a growing chorus for indefinitely sustaining aggressive post-crisis fiscal stimulus,” he wrote in the Financial Times.

“There is no question that huge uncertainty hangs over the global economy, but is the case against commonsense fiscal conservatism so compelling? I don’t see it.”

Paltry growth and continuing high unemployment are normal symptoms of a postfinancial crisis economic recovery, Rogoff says.

“Worrisome as the current conjuncture may seem, the normality of the crisis trajectory to date hardly suggests the need for a panicked fiscal response,” he wrote.

“Indeed, it is folly to ignore the long-term risks of already record peace-time debt accumulation.”

-Ken Rogoff, Professor of economics at Harvard University- yes, that Harvard University, and former chief economist at the IMF.

"Japan- massive fiscal stimulus building bridges to nowhere"

That was Alaska, fool.

Nobody doubts that the deficit must be dealt with - just a question of when. It was done under Clinton and lots of jobs were created. Undone by George II, and it destroyed the world's economy.

So you're advocating returning to policies that we know don't work?

ps: glad you found humor in THAT Northwood University. ;)

I did like that one!

As for Japan- I guess Allan Meltzer is a fool. How can an esteemed Carnegie Mellon economist have been fooled into thinking that Japan engaged in Keynesian fiscal stimulus???

From the NY Times:

The Hamada Marine Bridge soars majestically over this small fishing harbor, so much larger than the squid boats anchored below that it seems out of place.

Skip to next paragraph
Related
High & Low Finance: The Upside to Resisting Globalization (February 6, 2009)
Enlarge This Image

Shiho Fukada for The New York Times
Road-building in Oda, in Shimane Prefecture. Critics say Japan focused too much on building roads and other infrastructure.
Readers' Comments
Readers shared their thoughts on this article.
Read All Comments (51) »And it is not just the bridge. Two decades of generous public works spending have showered this city of 61,000 mostly graying residents with a highway, a two-lane bypass, a university, a prison, a children’s art museum, the Sun Village Hamada sports center, a bright red welcome center, a ski resort and an aquarium featuring three ring-blowing Beluga whales.

Nor is this remote port in western Japan unusual. Japan’s rural areas have been paved over and filled in with roads, dams and other big infrastructure projects, the legacy of trillions of dollars spent to lift the economy from a severe downturn caused by the bursting of a real estate bubble in the late 1980s. During those nearly two decades, Japan accumulated the largest public debt in the developed world — totaling 180 percent of its $5.5 trillion economy — while failing to generate a convincing recovery. . . .

Among ordinary Japanese, the spending is widely disparaged for having turned the nation into a public-works-based welfare state and making regional economies dependent on Tokyo for jobs. Much of the blame has fallen on the Liberal Democratic Party, which has long used government spending to grease rural vote-buying machines that help keep the party in power. . . .

Most Japanese economists have tended to take a bleaker view of their nation’s track record, saying that Japan spent more than enough money, but wasted too much of it on roads to nowhere and other unneeded projects.

Dr. Ihori of the University of Tokyo did a survey of public works in the 1990s, concluding that the spending created almost no additional economic growth. Instead of spreading beneficial ripple effects across the economy, he found that the spending actually led to declines in business investment by driving out private investors. He also said job creation was too narrowly focused in the construction industry in rural areas to give much benefit to the overall economy.

This is a picture of a bridge in Kyoto that runs right into the face of a mountain.

http://regex.info/i/JEF_027676.jpg

You should like that bridge, LICC: magical thinking. But it's not a bridge to nowhere: it's a bridge into a rock.

And it's most likely a pedestrian bridge, not a bridge built for cars. And 61,000 people isn't exactly "nowhere."

Your economist isn't wrong about the fiscal stimulus, just wrong about the timing:

"By the time the government injected trillions of yen in public funds at the tail end of the 1990s"

http://www.guardian.co.uk/business/2008/sep/30/japan.japan

It had to be done early in the

cycle.

It seems like that bridge actually was built for cars:

http://regex.info/blog/2007-03-25/403

It seems that it's just an unfinished project. If they are boring a hole into the rock as it says below the pictures, they would first need a bridge to get the equipment to the other side.

Or a chicken.

True, but they are spending the money to turn a 500 meter (.3 mile) ride to a 300 meter (.2 mile) ride. And at this stage it does look silly.

It does look silly at this stage, but as the comment states below it is a hairpin turn that has probably cost a lot of lives.

The Golden Glades Interchange in Miami is far worse:

http://lh4.ggpht.com/abramsv/R9WVh6tLexI/AAAAAAAALOY/tZWRBI-iZl8/s640/sdfgdfgrtytyt.jpg

I would not be at all surprised to learn that it's phase one of a much longer superhighway that will replace the entirety of the twisty road that the author refers to. From what can be seen of the topography in the accompanying map, a freeway that cuts straight across from left to right, instead of following all the curves of the riverbank, would make sense, especially for large trucks and buses, and doubly so in icy conditions.

Steve, it's not fair to compare a first-world place like Kyoto with a third-world place.

True, AH, true.