New Democratic Candidate - John Edwards

[Stormin Norman]

Finally, someone besides Gore and Lieberman is up for the Democratic nomination, a bright young star, an attractive candidate, and a potential winner. John Edwards announced earlier today his bid for the Democratic nomination. He seems like he has the capacity to upset Bush like Clinton did in 1992. What do you guys think?

[Anonymous]

Looks like another Kennedy-esque pretty boy who'll probably win over 70% of the female vote. He's one of those people you find really hard to dislike or hate, and that makes him dangerous in my opinion.

But on the issues, he's basically the same run of the mill democrat we're used to seeing in washington these days.

(Edited by Dark Capitalist at 11:39 pm on Jan. 2, 2003)

[Crusader 4 da truth]

Edwards in hardly a new candidate the liberal pundits have been pushing him even before Gore dropped out. The irrational excitement around his campaign largely based on one factor, he has an authentic southern drawl. Ridiculous as it may sound his appeal among Dems is geographical. They know they cannot win the presidency in 04 if they loose every state in south as they did in 2000 and 02.

To be even handed I will say this he is very articulate and people magazine did label him the sexist politician a couple of years back, being easy on the eyes never hurt. In terms of actual substance it’s clear he’s a typical democrat in many respects (he’s a trial lawyer) but he benefits from being wet behind the ears (only a senator since 1998). Because he does not have a long voting record he is free to remake his ideology to suit the times. This could be a big help because now he can come across as being tough on the war on terror, unlike Kerry who has a record of voting to cut defense spending and voted against the Iraq War in the early 90’s. On economic matters he is now trying to come of as a moderate, coming out for repealing the “Big Bush tax cut” in favor of “middle class tax cuts”. His agenda really doesn’t differ much from Lieberman. He’s a classic New Democrat cut from the Clinton mold.

In the final analysis I don’t see Edwards winning the nomination, because he’ll try and stake out a middle of the road position that wont appeal to the liberal base of the party. He’s very young and a rising star in the party he wont through away his future by running too far to the left to try to take down a popular incumbent president. No, he knows he's better off running in 2008 when there is a clear field. It will be either Kerry or Lieberman with Edwards as a likely Vice president. All of this might prove to be irrelevant because the only way the Dems can win 04 is if the War goes poorly (unlikely as bush has committed the full force of the military) or if the economy tanks (again unlikely as long as the congress passes much needed tax relief next year). All in all the Its going to be a tough couple of years for the dems.

(Edited by Crusader 4 da truth at 10:04 pm on Jan. 2, 2003)

[antieverything]

Much needed tax cuts? Taxes on the rich here in America is negligable...a tax cut won't do a thing just like every other time it was tried.

What liberal base of the DNC is this? Was there a huge shift in the last 10 years or what?

[Crusader 4 da truth]

Antieverything do you pay taxes? I suspect you do not because if you did you would notice those hefty deductions form your check. Taxes are completely out of control in the US. Here in New York the leftists are even trying to tax your movement! They want to institute a “commuter tax” to be levied on people that live outside the city but come in to work everyday. To bad the commuters don’t have a say they can’t vote on this tax or vote out the pols that are proposing it because they don’t live in the city. This is the most ridicules example of taxation with out representation since British Colonial rule in America.

“Taxes on the rich here in America is negligible” I have no idea where you get that statement from the fact is that in America 2.7% pay 49.7% of the taxes in 2001 according to IRS.

“...a tax cut won't do a thing just like every other time it was tried.” Again you should look back and check your facts every time we have had a serous growth oriented tax cut revenues to the federal treasury went up. Happened in the late 60’s after the Kennedy Tax cut and again in 80’s with the Reagan cut. But more importantly the people that earned the money actually got to keep more of it.

[antieverything]

We had growth during Reagon because Carter put us into an intentional and necessary recession to make the growth happen...not because of tax cuts. Taxes ARE negligable here in America...we have lower tax than almost any other comparable country and some of those social-democracies' economies were still outgrowing the American one for quite some time...fuck the USSR was outgrowing us for most of its existance but that isn't that important because they were rapidly industrializing...Western Europe outgrowing us should raise some red flags though.

[antieverything]

And so what if the top 2% pay 50%...the top 5% of the population owns 99+% of all nonresidential capital! I guarantee you that you feel the burn from taxes more than the richest do.

Here is an important statistic to remember about American society. The polarization of wealth is WORSE than it was in Europe when Marx wrote the Communist Manifesto.

[Crusader 4 da truth]

Anti I don’t mean to be rude but your last two posts make very little sense, let me try and point out some of the fallacies in your thinking.

“We had growth during Reagon because Carter put us into an intentional and necessary recession to make the growth happen...”

To your credit this statement is half right Jimmy Carter certainly did mismanage the American economy, but to suggest he did so intentionally? That’s just nuts, what possible motivation would he have for trying perform poorly? Damaging his legacy and his party’s credibility when it comes to economic issues? Then you go on to state recession is necessary to make growth happen I’m not sure what you mean by this (I’m not even sure you know what you mean). Recession is the contraction phase of the business cycle where the GDP declines by 10% or so and unemployment rises.

“…not because of tax cuts. Taxes ARE negligable here in America”

Maybe you should look at the data, when you make a claim it should match the evidence. If it doesn’t then you have problem you’ve made incorrect statement. Here are the facts tax freedom day (that’s the day of the year when you stop working to pay off your taxes) is currently May 7 for the typical American taxpayer This means the average American must work form January 1 thru May 7 to earn enough money to pay all federal state and local taxes.

“The typical American family pays more in total taxes than it spends on food, clothing, and shelter combined. That's over 38 percent for total taxes vs. 28 percent for food, clothing and housing.” (Tax Foundation)

I’m not sure what evidence you can point to demonstrate that taxes are “negligible.”

“social-democracies' economies were still outgrowing the American one for quite some time...fuck the USSR was outgrowing us for most of its existance but that isn't that important because they were rapidly industrializing...Western Europe outgrowing us should raise some red flags though”

I’m not sure you understand the meaning of your words “growth” is an economic term that describes an increase in an economy's ability to produce goods. There are a number of indicators you can point to demonstrate growth (what are you using?) the most common is an increase in the GDP and America far and away has the largest GDP of any nation (its not even close Japan is number two). The US accounts for only 4.7% of the population of the world but produces a staggering 31.2% of the Global GDP (United Nations stats)

The USSR was not “out growing” the United states by any economic measure in 1950 its GDP was a only 35% of Americas they improved slightly in 1985 moving to a GDP that is 39% of Americas. They never did come anywhere near equaling America’s economic output.

“And so what if the top 2% pay 50%...the top 5% of the population owns 99+% of all nonresidential capital”

Again nonresidential capital is not an economic indicator nor the bases of our tax system. In America we have an income tax system and currently in that system according to the IRS 2% of the people are paying close to 50% of the taxes. Are you trying to argue for a national tax based on “nonresidential capital”???

“Here is an important statistic to remember about American society. The polarization of wealth is WORSE than it was in Europe when Marx wrote the Communist Manifesto”

Here you have no evidence to back up your claim. Marx saw the world divided into two classes the Proletariat and the Owners. His claim was that as the owners accumulated more and more wealth and the people would eventually rise up and dispose their rule. He never predicted the rise of the middle class, which has totally invalidated his theories. How could he, at the start of the industrial revolution their size was negligible unlike today in America where they are the majority of Americans. Along with their rise as percent of population since the 1800’s was a corresponding rise in their standard of living.

I suggest you when you get to high school or college you take an economics course if you can fit into your schedule, it will give you a solid scientific base from which to argue your principles.

[peoplenotprofits]

who cares

[antieverything]

1)The recession of 1982 hit during Reagan's second year in office. Double-digit inflation was well on its way to being defeated by this time, and Reagan's tax cuts and deregulation policies were already in effect. Blaming Carter's tax and regulation policies for this recession is therefore pretty stupid. Inflation had been snowballing for fifteen years before Carter and it began to drop while Carter was in office.

In late 1979, Chairman Paul Volcker of the Federal Reserve sought to defeat rising inflation by tightening the money supply -- that is, he put the U.S. economy through an intentional recession. There was a brief and unintentional recovery in 1981, so, with inflation still high, he tightened the money supply again, resulting in the unusually severe 1982 recession. By the end of that year, inflation looked beaten, so Volcker flooded the economy with money and fueled the subsequent recovery...so you were right to a point about me being a little bit confused about the facts but Carter did not ruin the economy, Reagan did.

2)There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and until recently they were outgrowing us.

But, before we examin the effect of tax cuts on growth, it should be noted that the very premise of the conservative myth that growth is good is false. The population explosion is adding approximately 1 billion people to this planet every decade. That's nearly the entire population of China. Under the attendant threats to the environment, including global warming and ozone depletion, economists and environmentalists today are increasingly calling for a sustainable economy. It is a sign of how backwards we actually have it that we consider an economy healthy only if it grows, and the faster the better. examining this issue is important, because conservatives see growth as an economic goal, and tax cuts as the best way to achieve that goal. So we should study tax cuts for their efficacy in achieving desirable outcomes.

A review of American history makes the opposite case that conservatives would like it to make: high growth usually coincides with high taxes. During both world wars, taxes soared to record heights. And the supercharged economies that resulted produced high growth for decades afterwards. World War I was followed by the Roaring 20s; World War II was followed by the boom times of the 50s and 60s. The reason why wars are good for the economy is a matter of controversy--one likely theory is that war compels government to invest heavily in manufacturing. Whatever the reason, the point is that these economic boosts occur during a period of unusually high taxation.

For Example...

During World War II (from 1940 to 1945), the size of the U.S. economy roughly doubled -- the fastest period of growth in U.S. history. And during this era, the top tax rate soared to 91 percent, and the bottom rate to 18 percent -- again, the highest in U.S. history. In 1944, federal taxes reached 21.7 percent of the GDP -- again, the highest in U.S. history.

When the U.S. emerged from World War II, it had the largest and best-functioning economy in the world. The other industrialized nations lay destroyed, and had to start rebuilding from scratch. Although the U.S. has remained the most prosperous nation in the world ever since, these other nations have, until the recent European recession, been growing faster than the U.S. And they have been doing so with far higher tax rates!

Here is a nice table I found...

Country % GDP
----------------------
Sweden 53.2%
Denmark 48.3
Norway 47.1
Netherlands 47.0
Germany 39.2
Finland 37.7
Canada 37.3
Japan 30.9
United States 29.8

Percent of U.S. individual worker productivity (U.S. = 100%)

Country 1950s 1960s 1970s 1980s 1990
------------------------------------------------
United States 100% 100 100 100 100
Canada 77.1 80.1 84.2 92.8 95.5
Italy 30.8 43.9 66.4 80.9 85.5
France 36.8 46.0 61.7 80.1 85.3
Germany 32.4 49.1 61.8 77.4 81.1
United Kingdom 53.9 54.3 58.0 65.9 71.9
Japan 15.2 23.2 45.7 62.6 70.7
[hr]I hope you enjoyed this as it took me several hours to do and I should be doing my college applications. By the way, I'm only 16...graduating early and will almost certainly be a national merit scholar. Currently I am a contender for full scholarships to two of Texas' leading liberal arts schools and am almost guaranteed a full ride to Texas Tech's Honor College...but I still can't punctuate correctly. Damn.

3)The rise of the middle class does in no way invalidate Marx's theories...the middle class rose after the fall of Feudalism, actually, the middle class is what marked the end of Feudalism. You will notice that when markets are left alone, things tend to progress to the rigid 2 class form...the middle class being a more priviliged class of worker. Regulation saved capitalism. Things would have progressed in the way Marx foresaw--capitalism collapsing devolving into a monarchy--if it weren't for government intervention and wealth redistribution programs.

Oh, and yes, I am planning on taking economics courses in college.

I hope you will take me more seriously from now on.

[peoplenotprofits]

good you know how to copy and paste

[antieverything]

Actually, aside from the tables, I paraphrased that from multiple sources...good you know how to post one liners that add nothing to the discussion.

[peoplenotprofits]

Why would i want to argue in endless circles of what kind of "government" to have?, how much , or how to fund it,or what kind of economic theories or military/foriegn policy to favor.ZZZZZZZZZZ.
its just pointless because its doesnt exist.

[Socialist Pig]

Antieverything, you are my new hero ;)

*sigh*

Perhaps someone who actually can represent the people of America will run for office. I don't see this being to likely considering you need about 10 million or USDs to establish yourself.

[Stormin Norman]

Why would i want to argue in endless circles of what kind of "government" to have?, how much , or how to fund it,or what kind of economic theories or military/foriegn policy to favor.ZZZZZZZZZZ. its just pointless because its doesnt exist.

Is it just me, or is this person a dip shit? This quote will be forever remembered in my Hall of Fame!

(Edited by Stormin Norman at 1:46 am on Jan. 4, 2003)

[Stormin Norman]

Excellent analysis, Crusader 4 the truth. You are 100% correct in your assessment of John Edwards campaign.

In addition, thanks for taking up that issue with antieverything, another job well done.

[antieverything]

I've seen some pretty clueless people before but peoplenotprofits takes the cake.

[American Kid]

peoplenotprofits can eat a dick. Sounds like the typical "anarchist". Crazy.

Crusadah fo-ah da troof and aniteverything I want to say bravo as this was one of the most informative and civil "debates" I've seen around these parts for quite some time. Well done.

Of course, I call it a draw.

But good sportsmanship, gentlemen. We should all take a page out of this book.

-AK

[Stormin Norman]

Ak is right, and I should give credit where credit is due. Antieverything did a good job. Although I completely disagree with his stance, he did do a decent job presenting it. I was surprised how well you defended Carter's economic debaucle. Of course your wrong about that, but I was impressed that you were able to come back with a defense.

[antieverything]

I've shown you the facts of my position, you show me your's.

I think that I have disproved the myth that Carter caused the huge inflation...it started because of deficit spending during Nam, in fact he (well, the Fed during his term lead by his nominee) put a stop to its rise. The recession WAS induced by the Fed to combat inflation and the market was again flooded with money during Reagan's term but by the same man who was still in charge of the Fed. The market recovered and expanded for 7 years afterwords because of the market being flooded.

The Reaganite argument is totally wrong...no nice way to say it. The capitalists had their tax cuts already. Worker productivity continued to rise at THE SAME rate as it had in the 70's and Capitalist investment didn't rise...the jobs didn't get created.

I forgot to mention another cause of the bullshit Carter came into: Stagflation caused by Capitalists lining their pockets when the Fed flooded the market with money instead of creating new jobs like you guys say they always do.

(Edited by antieverything at 6:40 pm on Jan. 3, 2003)

[Stormin Norman]

I know the inflation started way before Carter. I would take issue with the claim that Carter used sound economic policy to get it under control. His economics were definetely flawed.

I will return later to explain why. For now I must go get my sister a birthday present.

[antieverything]

I assume you are refering to the actions of the Fed because Carter had his own string of deregulative cuts and the top tax rate hardly increased at all.

[Zozothedog]

since no one on this is talking about the democratic front runner, and I did here regan mentioned, did everyone know that Regan is still alive? jesus I just found out, that guy is old...also did ayone see footage of that Senator Jessy Helmes Bday party.. my god the people of NC should be ashamed, he looks like walking, (or rolling) death, anyhow,

I just hope hilarly doesnt run, I dont know why, but I hate that *****

[Crusader 4 da truth]

Storming Norman I’m glad you liked my post on the Edwards. Truth be told I was about to stop posting here because I didn’t think anyone was reading them. The few that responded choose to ignore that facts or claim that it was part of a government conspiracy. An honest and open debate is basically impossible with most of the people on this forum (Anti is an exception). You have obviously been posting here for a long time. I’ve got a question, how do you stand it, and have you converted anyone yet?

Anti I’m very impressed, I think it’s awesome that you did research (although you shouldn’t have postponed your college apps). You’re one of the few intelligent socialist on this board. You actually rebutted my arguments with facts! I haven’t been posting long but in all of my posts you’re the only one to do so. This is key, the use of facts to build your argument. You can’t persuade anyone that socialism is a great system if you deny or ignore the facts. Keep hunting for evidence to support your claims. I can see that you understand that your goal should be to convince through peaceful means not to coerce through fear and violence, that puts you ahead of most of the thoughtless socialists that post here. That being said I obviously take issue with your analysis of the facts.

I’m splitting my posts in there pieces rather then one long-winded one. I want to address some basic Macroeconomics just insure that every body is on the same page (people for profits you especially should take note), before I get to my rebuttal in the next post, and lastly the effect of taxes on the economy .
No conservative or liberal ideology just some basic economic terms and facts.

Macroeconomics 101:

America is a Market-oriented economy (also termed capitalism) this means that the economy relies heavily on markets to answer basic questions of allocation, but with a modest amount of government involvement. While a command economy (communism) is just the opposite, but they both seek to answer the same questions.

To investigate the workings of the economy and conduct economic analysis we utilize the scientific method. That means economists develop theories, test hypotheses, and seek to explain things in a systematic way through data. In short Economics is a science not an art. Macroeconomics is the branch of economics that studies the entire economy, as compared to microeconomics, which is study of the economic trees.

There are three goals of an economy that are relevant to the study of macroeconomics they are full employment, stability, and economic growth. Full employment is the condition in which all of the economy's available resources are engaged in the production of goods and services. Stability is the condition in which the economy avoids large changes in production, employment, and especially prices. Economic growth is the condition in which the economy's production possibilities are expanding over time. Again no ideology here just facts both command and market oriented economies claim to provide solutions to achieve these goals.

You may have heard the term business cycle or the economy is cyclical. This occurs in four phases expansion, peak, contraction, and trough. The whole cycle typically lasts 3 to 5 years but it could last ten or more. Unemployment inevitably rises during contractions and inflation tends to worsen during expansions. Obviously governments would like to encourage a longer expansion phase and shorten the contraction phase while checking unemployment and inflation. To do this the federal government frequently undertakes various fiscal and monetary policies.

Fiscal policy is the use of the federal government's powers of spending and taxation to stabilize the business cycle. If the economy is mired in a recession, then the appropriate fiscal policy is to increase spending or reduce taxes--termed expansionary policy. During periods of high inflation, the opposite actions are needed--contractionary policy.

Monetary policy is The Federal Reserve System's use of the money supply to stabilize the business cycle. As the nation's central bank, the Federal Reserve System determines the total amount of money circulating around the economy. For example to counter a recession, the Fed would undertake expansionary policy, also termed easy money. To reduce inflation, contractionary policy is the order of the day, and goes by the name tight money.

Lets talk a little about growth because it came ups so much in the previous posts. It’s basically the process of increasing the economy's ability to produce goods. Growth (again one of the three macroeconomic goals of an economy) is usually measured by increases in gross domestic product (GDP). The primary way of achieving these increases goes by the term investment.

Investment is the sacrifice of current benefits or rewards to pursue an activity with expectations of greater future benefits or rewards. Investment (source of economic growth) is typically used to mean the purchase of capital by business in anticipation of the profit.

It is important to take note of the fact that Marx and his theories play almost no role in the Science of Economics. Indeed your political science teachers will spend far more time on him then any economic course will. This is not only true in the real world but on this forum, just ask the site administers. When they created this site they didn’t see fit to include a subsection where people could post their opinions on Marxist economics theory, curious.

The real debate in Economics is between Keynesian theory and supply side economics (I’m a supply sider), both theories stress the market not government. You can try and hypothesize about why this is, but the fact is that Marx is irrelevant.

All right I hope that wasn’t to boring but now everyone who reads this post will have the tools to speak intelligently about the topic maybe we can broaden the discussion to include more people.



(Edited by Crusader 4 da truth at 7:09 pm on Jan. 6, 2003)

[Crusader 4 da truth]

Ok, now that everybody is hopefully up to speed and on board we can analyze anti’s post and see where the problems occur.

“1)The recession of 1982 hit during Reagan's second year in office. Double-digit inflation was well on its way to being defeated by this time, and Reagan's tax cuts and deregulation policies were already in effect.”

Reagan inherited an unusual set of circumstances from jimmy carter record inflation coupled with high unemployment. This led economists to coin the term stagflation (stagnation + inflation), to describe this anomaly. The obvious question was what are the appropriate policy proposals to aid economic recovery? Reagan instituted an expansionary fiscal policy (tax cuts and government spending) and a contractionary monetary policy (which the Fed had started in 79).

You’re partially right about the recession 82 it was a direct result of the Federal Reserve aggressively trying to reduce liquidity in the market to check inflation, but the recession was an undesired byproduct not an intended consequence. You’re wrong if you are trying to insinuate that Reagan’s tax cut caused the recession of 82 and here is why. Economic recovery tax act of 1981 (Unofficially called the Kemp-Roth) was not even passed by Congress until midsummer of 1981 and did not begin to take effect until October 1, 1981. Tax cuts are not magical quick fix; the idea is to give individuals incentives to invest. In the Kemp-Roth bill the decrease in individual income taxes was phased in over three years. Lastly, Reagan didn’t even propose his first budget till fiscal year 1982.

“Blaming Carter's tax and regulation policies for this recession is therefore pretty stupid. Inflation had been snowballing for fifteen years before Carter and it began to drop while Carter was in office.”

Carter did inherit inflation but when he left office at the end of his term it was worse. Hovering almost at 20% the highest it’s ever been last century. He took a bad situation and exacerbated it, that’s failure by any measure.

“2)There is no historical evidence that tax cuts spur economic growth. The highest period of growth in U.S. history (1933-1973) also saw its highest tax rates on the rich: 70 to 91 percent. During this period, the general tax rate climbed as well, but it reached a plateau in 1969, and growth slowed down five years later. Almost all rich nations have higher general taxes than the U.S., and until recently they were outgrowing us.”

Trying to perform economic analyze on the time period between 1933-1973 is unsound, because the governments policies toward the economy was not constant through out. That time period includes a World War (which is a rare event), several differing Federal Reserve Chairman (each with differing monetary policies) and several differing presidential administrations (each with differing fiscal policies). That time period even includes the Kennedy tax cut.

If you wanted to analyze the economy during WWII or the economy during Nixon administrations that would make more sense because the government policies where consistent during those time periods.

”But, before we examin the effect of tax cuts on growth, it should be noted that the very premise of the conservative myth that growth is good is false. The population explosion is adding approximately 1 billion people to this planet every decade. That's nearly the entire population of China. Under the attendant threats to the environment, including global warming and ozone depletion…”

I think your veering off topic here I’m talking about economic growth not population.

“It is a sign of how backwards we actually have it that we consider an economy healthy only if it grows, and the faster the better. examining this issue is important, because conservatives see growth as an economic goal, and tax cuts as the best way to achieve that goal. So we should study tax cuts for their efficacy in achieving desirable outcomes.”

Economic growth (not population) is one of the three goals of an economy (stability and full employment are the other two). It’s not a partisan issue both liberals and conservatives want to achieve it, but they differ in their approach, while radical liberals (communists and socialists) offer no solution. If your economy is not growing your in the contraction phase of the economic cycle. Its ability to produce goods and services is shrinking. This is a recession, if the economy fails to grow for about too long you will have entered a depression. Again neither liberals nor conservatives want these things; both want to encourage investment to spur Economic growth. Runway economic growth (sometimes referred to as an “over heated” economy) is not preferable either the result there is high inflation which if unchecked will ultimately affect the stability of the economy. The ideal situation is strong economic growth coupled with low inflation rates.

“A review of American history makes the opposite case that conservatives would like it to make: high growth usually coincides with high taxes.”

This is argument is just madness. Using this logic the ideal tax rate would be 100% the government should take everything that people earn. Why would anyone want to work at all?

“During both world wars, taxes soared to record heights. And the supercharged economies that resulted produced high growth…”

War is not a sustainable economic policy, meaning you can’t expect to be mobilizing for a war every time you entire a recession. During the WWI and II the government did make massive investments to secure victory that did benefit the economy. However you’ll notice that first Gulf War provided no bounce to the economy, because the government was using Cold War stockpiles rather then placing new orders for tanks and other military hardware.

”...the middle class rose after the fall of Feudalism, actually, the middle class is what marked the end of Feudalism.”

Your absolutely right about this, that’s why conservatives are so interested in promoting pro growth economic policies that, expand the middle class. They ultimately demand more political rights and encourage more open and transparent government. The rise of the middle class is key the key to raising third world living standards and reforming their governments. For some reason Marx choice to ignore them entirely instead viewing the world as a constant struggle between the owners of the means of production and the works.

“You will notice that when markets are left alone, things tend to progress to the rigid 2 class form...”

This is quite a statement; unfortunately I’d like to see some evidence.

“the middle class being a more privileged class of worker.”

The middle class is more privileged hence the distinction as a separate class. But lets for the sake of argument say I accept your premise that the middle class is just part of worker class then you’ve got another inconsistency to deal with. The majority of Americans own stock they own the companies they work for and reap the benefits when it does well. Marx never predicted or understood the consequences of this. Another facet of openly democratic capitalist countries that Marx never foresaw was social mobility. He could never invasion a country like the USA where a man could immigrate from a poor country coming from a family of subsistence farmers with $100 in his pocket and in his lifetime (less then 20 years) be middle class, own a home, and have two cars in the garage. I don’t blame him for not having the foresight to envision a system like that, its total unprecedented in the history of man and yet its my fathers story.

“Regulation saved capitalism.”

If you really believe this, if the only thing propping up our economy (the largest and most prolific in the world) is government regulation then you and your comrades should be fighting has hard has possible to encourage deregulation. If your stated goal is to have a revolution and the only thing that is preventing the total collapse of capitalism is government regulation, then why not fight to remove it?

“Things would have progressed in the way Marx foresaw--capitalism collapsing devolving into a monarchy”

If this is what Marx thought then he’s really one confused guy, capitalism is an economic system while monarchy is political one.

(Edited by Crusader 4 da truth at 7:01 pm on Jan. 6, 2003)

[Crusader 4 da truth]

Now lets use some logic and our newly found expertise in economics to examine how taxes impact the economy.

An increase in tax rates reduces the share of additional income that earners are permitted to keep. This adversely affects output for two major reasons. First, the higher rates reduce the payoff that people derive from work and from other taxable productive activities. When people are prohibited from reaping much of what they sow, they will sow more sparingly. Thus, when marginal tax rates rise, some people, those with working spouses for example, will opt out of the labor force. Others will decide to take more vacation time, retire earlier, or forgo overtime opportunities. Still others will decide to forgo promising but risky business opportunities. These reductions in productive effort shrink the effective supply of resources and thereby retard output.

Second, high tax rates also encourage tax shelter investments and other forms of tax avoidance. As marginal tax rates rise, investments that generate paper losses from depreciable assets become more attractive. So, too, do business activities that present opportunities to deduct expenditures on hobbies (for example, collecting antiques, raising horses, or traveling) and personal amenities (luxury automobiles, plush offices, and various fringe benefits). Thus, people are directed into activities because of tax advantages rather than profitability. Similarly, they are encouraged to substitute less desired tax-deductible goods for more desired nondeductible goods. Waste and inefficient use of valuable resources are a by-product of this incentive structure.

It is important to distinguish between a change in tax rates and a change in tax revenues. Because higher tax rates discourage work effort and encourage tax avoidance and even tax evasion, the tax base will shrink as the rates increase. When something is taxed more heavily, you will get less of it. Therefore, an increase in a tax rate causes a less than proportional increase in tax revenue.

Empirical studies of tax cuts that happened during the sixties and eights support the supply-side position. The results of the Kennedy-Johnson tax cuts of the midsixties were clear. Between 1963 and 1965, tax rates were reduced by approximately 25 percent. The top marginal tax rate was cut from 91 percent to 70 percent. Simultaneously, the bottom rate was reduced from 20 percent to 14 percent. For most taxpayers the lower rates reduced tax revenues. In real 1963 dollars the tax revenues collected from the bottom 95 percent of taxpayers fell from $31.0 billion in 1963 to $29.6 billion in 1965, a 4.5 percent reduction. In contrast, the real tax revenues collected from the top 5 percent of taxpayers rose from $17.2 billion in 1963 to $18.5 billion in 1965, a 7.6 percent increase. The rate reductions of the sixties reduced the tax revenue collected from low-income taxpayers while increasing the revenues collected from high-income taxpayers.

Major tax legislation passed in 1981 and 1986 reduced the top U.S. federal income tax rate from 70 percent to approximately 33 percent. The performance of the U.S. economy during the eighties was impressive. The growth rate of real GNP accelerated from the sluggish rates of the seventies. U.S. economic growth exceeded that of all other major industrial nations except Japan.

The critics of the eighties tax policy argue that the top rate reductions were a bonanza for the rich. The taxable income in the upper tax brackets did increase sharply during the eighties. But the taxes collected in these brackets also rose sharply. Measured in 1982-84 dollars, the income tax revenue collected from the top 10 percent of earners rose from $150.6 billion in 1981 to $199.8 billion in 1988, an increase of 32.7 percent. The percentage increases in the real tax revenue collected from the top 1 and top 5 percent of taxpayers were even larger. In contrast, the real tax liability of other taxpayers (the bottom 90 percent) declined from $161.8 billion to $149.1 billion, a reduction of 7.8 percent. These findings confirm what the supply-siders predicted: the lower rates, by increasing the tax base substantially in the upper tax brackets, caused high-income taxpayers to pay more taxes. In effect, the lower rates soaked the rich.

Probably the most detailed study of the tax changes in the eighties was conducted by Lawrence Lindsey of Harvard University. Lindsey used a computer simulation model to estimate the impact of the eighties' tax-rate changes on the various components of income. He found that after the tax rates were lowered, the wages and salaries of high-income taxpayers were approximately 30 percent larger than projected. Similarly, after the rate cuts capital gains were approximately 100 percent higher than projected, and high-income taxpayers' business income was a whopping 200 percent higher than expected. Lindsey concluded that the main supply-side effects resulted from (a) people paying themselves more in the form of money income rather than fringe benefits and amenities, (B) increases in business activity, and © a reduction in tax shelter activities. His findings undercut the position of those supply-side critics who had assumed that substantial supply-side effects were dependent on a large increase in labor supply.

Zozothedog you won't have to worry about Mrs. Clinton she'll wait for 2008 when she's got a clear feild to run.

[antieverything]

OK...I'll start with the first post. There are many levels between simple command economies and market economies. I, for instance, am a market socialist. There is such a thing as state capitalist so a market economy is not automatically a capitalist one.

Your comments about fiscal policy, while not wrong, are outdated. That is how it did work but Keynesian policies began to fail during this era because of one of the major flaws of capitalist economics--homo economicus: assuming that the capitalist will invest to attain more wealth...in reality there is a sociological phenomenon called capitalist ultra conservativism which causes them to simply pocket the money (be they tax breaks or whatever) and quit while they are ahead (this results in stagflation).

You misunderstood me because I was not entirely clear about growth. It is good but not ALWAYS good. Growth must happen within a sustainable economy.

There are other schools of conservative economics besides the laughable supply-side pipe dream. Supply-side was created by a group of non-economists for the purpose of telling people what they wanted to hear--that we could cut taxes, increase spending, and fight both unemployment AND inflation. One of the architects of the movement later said that the idea was only a trojan horse for tax cuts for the richest and "trickle-down" economics. Indeed, how else would people be expected to vote to accept tax hikes (indeed, low and middle income taxes did rise) in exchange for tax cuts for the richest?

While it is accepted that economies slow down under heavy taxation, the point at which the economy slows down is considered to be significantly higher than what the supply-siders and indeed most conservatives put it at.

I am not a Marxist but Marx did address the middle class. He refered to them as petit bourgouise or something like that.

Now for the second one.

You fail to address the HUGE defecit that Reagan put us into with his "voodoo" economics (as Bush Sr. once called it.)

Now I will analyze your assertion that tax cuts do indeed cause an increase in tax collections.

It didn't work during Reagan.

Individual Income Tax Collections (millions) (1)

Year Current Constant (87 dollars)
-------------------------------------------
1981 $285,917 $367,692

1982 297,744 356,366
1983 288,938 332,033
1984 298,415 328,470
1985 334,531 354,677
1986 348,959 359,307
1987 392,557 392,557
1988 401,181 387,128
1989 445,690 411,533
-----------------------------
82-89 total: 2,922,691
1981 (times 8) -2,941,536
-----------------------------
Net 8-year loss -18,845


Corporate Income Taxes (millions)

Year Current Constant (87 dollars)
-------------------------------------------
1981 $61,137 $78,623

1982 49,207 58,991
1983 37,022 42,544
1984 56,893 62,623
1985 61,331 65,024
1986 63,143 65,015
1987 83,926 83,926
1988 94,508 91,224
1989 103,291 98,092
------------------------------
82-89 total: 567,439
1981 (times 8) -628,984
------------------------------
Net 8-year loss -69,545
Combined individual and corporate income tax loss: $88 billion.

Keep in mind that this does not count the lost revenues that could be expected from a growing economy.

Also remember that, because the economy grows in the long run, tax collections will inevitably start rising again sooner or later as the tax base continues to grow. Therefore, supply-siders do not have the argument that there was a delay in increased tax collections, or that we can't expect tax policy to have immediate effects. The simple fact is that there was a 5 year drop in tax collections, which was extremely uncharacteristic of a growing economy. And during that time we incurred a trillion and a half dollars in debt, so the alleged value of such a tax policy is refuted outright.

The Kennedy tax cuts are another favorite supply-side myth; many claim that once the tax cuts went into effect in 1964, income tax collections grew. But as you can see from the chart below, growth in income tax collections sharply dropped off:

Federal Income Tax Collections (Constant dollars, CPI-U) (3)

Year Receipts Percent change from previous year
--------------------------------------------------
1961 $138,069 ---
1962 150,567 + 9.0%
1963 155,375 + 3.2
1964 156,804 + 0.9 < tax cut takes effect
1965 154,475 - 1.5

In 1965, the economy was in the fifth year of a nine-year expansion, and for income tax collections to see negative growth was, again, most uncharacteristic. Income tax collections did rise in 1966, but by this time President Johnson was accelerating the economy with Keynesian deficit spending on the Vietnam War. (These deficits he hid by unifying the federal budget with Social Security.) The greater economic activity resulted in more tax collections, and to disentangle any alleged supply-side benefits from the Keynesian benefits is all but impossible.
(http://www.korpios.org/resurgent/L-taxcollections.htm)

You even failed to mention the Roaring 20's, the other of the supply-siders' supposedly incontrovertable pieces of evidence. I'll just refute it preemtively...income tax collections did increase despite tax cuts but at that time only 5% of the population paid any income tax at all! The rise in collections happened because wages for the top 5% were skyrocketing at the expense of the rest of the population...only one period in our history is able to match such a rise in income inequality: the Reagan years! If the bottom 95% of the population was taxed at that time revenues would probably have dropped.

It is true that these great times of taxation and prosperity were because of war but this high taxation actually paid for the first world war entirely!

Your statement about Reagan inheriting the highest rates of inflation is blatantly false. Inflation peaked under Carter and began to fall.


This is all out of order and I probably forgot something so, it's whatever.

[antieverything]

anyone home?

[RedComrade]

Hello Comrades and Cappies alike I am preety young and I am still in middle school so i have not had the the privelage to take economics classes or learn much about the actual science behind it. This debate seems to be economics oriented so I am curious to all you economists out there wat a good unbiased objective intro to economics would be that is readable to someone with 10-11th grade level intelligence...??