That's possible but there have been several tax cuts since then where the correlation isn't strong as well as instances when there were tax increases and both revenue and investment rose.
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And I would think there are a variety of other factors that come into play with the timing as well. So there will be examples to show where both have worked and both haven't worked. And I would think there are various external factors that cause the end result to vary.
Exactly which is why one should not speak in such absolutes.
Probably the biggest single travesty in modern American politics...
Ahh ok. Yeah I agree. Mugsy speaking in absolutes is his belief of what would happen not necessarily what would actually happen.
The formula for supply side economics was drawn on a cocktail napkin at a White House dinner party in the '70's. We now call it the Laffer Curve
First, I don't care what they do with it, what I care is that a system isn't in place that creates a double tax and where any government feels like profits, or at least part of it "belongs" to the government. And capital is a commodity, and businesses have an interest to use that money to generate money.
Second, if there are no corporate taxes, companies, both USA and foreign will have a significantly reduced part of the of their operations costs, as well as the burden to stay in compliance and process and pay taxes, and thus doing business in the USA becomes more profitable.
Third, much of that money might also go to investors via dividends, which is always a good thing.
As for your comment on C-level employees getting bigger bonuses, I'm going to guess they only get those bonuses from accomplishing something, and good for them if they do. Maybe they'll buy a 2nd house, that has to be built with lumber, concrete, and drywall, and hardwood and tile flooring, and has plumbers and electricians, and painters, and landscapers, and so on and so on, and then they have to pay nice high local property taxes to help fund communities and schools.
The problem/issue for supply side, is the assumption people will use their new found wealth to purchase goods, instead of placing them in non-job creating investment vehicles. And companies will re-invest or expand, instead of hoard cash, buy-back stocks or reduce debt.
This assertion has always been a mystery to me.
I see it in the WH budget releases but when I look at the Treasury's 'Debt to Penny' tables I can't find a year that debt declined.
If you look the WH numbers they show both 'on budget' and 'off budget' (SSI, etc.) surpluses in 1999 and 2000.
Yet if you look at the annual debt levels according to the Treasury:
09/30/2002 - 6,228,235,965,597.16
09/30/2001 - 5,807,463,412,200.06
09/30/2000 - 5,674,178,209,886.86
09/30/1999 - 5,656,270,901,615.43
09/30/1998 - 5,526,193,008,897.62
09/30/1997 - 5,413,146,011,397.34
It only shows increases year over year in total debt. How does that work?
As an aside, '56 and '57 are the last years that the Treasury shows outstanding debt being reduced.
Boils down to whether you expect markets or governments to ultimately make more productive use of capital.
Germany conducted an illustrative macro experiment on the subject for a few generations.
Difference in outcomes was perceivable.
So where did it go? Is Al still hiding it in that damn lock box!
I'm serious. I don't understand how they're claiming surpluses, yet just digging deeper into debt y-o-y without exception.
[was not my complete thought]. I would agree that, in a traditional industrialized economy, the private company is more productive with capital. The widget manufacturer will, generally, take additional capital and invest in new machinery, expansion, etc. to make more widgets at a better margin. I do not know if you can have the same expectations in a service-based economy. Further, recent data does not support the suggest that increased capital (in this case post-2008 recession improvement in GDP) increases wages for the middle class.
I got a $300 check in 2000. I believe some people got more.
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As I mentioned earlier, Dubya "refunded" the surplus by way of a special one-time tax refund for $500 per person.
WH budget docs show surpluses in 1999 and 2000.
GWB was governor of Texas then. Budgets he was signing came 2001-09, although his successor signed additional appropriations for the '09 FY upon coming into office.
He signed the legislation with the $300-600 rebates in the summer of 2001.
There has to be some other answer.
It's not about 'industrial' vs 'service', but price driven decision making in capital allocation vs bureaucratic. If you're not operating off price signals you're just guessing, and long term, un-moored from the reality of supply and demand, those guesses won't work out better than the real information behind prices.
I think it gets difficult to measure real capital when the central banks are going bonkers increasing fiat balance sheets. I'm personally persuaded that central bank monetary creation and capital manipulation is the primary driver of wealth inequality.
A funny thing happened back in 1971:
You're mistaken on the timing. Which leaves the question, what surpluses, where did they go?
It's not about 'industrial' vs 'service', but price driven decision making in capital allocation vs bureaucratic. If you're not operating off price signals you're just guessing, and long term, un-moored from the reality of supply and demand, those guesses won't work out better than the real information behind prices.
I think it gets difficult to measure real capital when the central banks are going bonkers increasing fiat balance sheets. I'm personally persuaded that central bank monetary creation and capital manipulation is the primary driver of wealth inequality.
A funny thing happened back in 1971:
You're mistaken on the timing. Which leaves the question, what surpluses, where did they go?
Meh...it was $300, not something I would pay attention to. Probably still in a drawer.
. I assume that the tax rebate was paid for by the surplus. But, with any surplus (however few we have had) it is usually swallowed up by increases in discretionary spending.
Meh...it was $300, not something I would pay attention to. Probably still in a drawer.
You say that. Family friend played in the MLB, being 19-20 ish, he'd get all these checks for various activities and just toss them in the drawer at his beach house. His sister was like "what, this is $13000 and you have 8 of them in here! Go to the bank!" Or whatever the check amount was, but they were large apparently. I heard all this second hand.
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I do not like to stray much into political threads or to nit pick, but I think you meant to point out that repatriation of funds (bringing them back to the U.S.) from overseas is the goal, not that we should get rid of repatriation. U.S. based corporations keep money invested offshore often because they are taxed at higher rates by the U.S. without enough corresponding foreign tax credits if they pay dividends to the U.S. parent from subsidiary entities in a lower tax jurisdiction. A lower tax rate would help with repatriation, but there are many factors at play. A corporation can and should reinvest money abroad if it has a higher profit potential being there than bringing it back.
The formula for supply side economics was drawn on a cocktail napkin at a White House dinner party in the '70's. We now call it the Laffer Curve
Yes, this is brilliant and correct theory. The difficult part is determining where the numbers are on the curve. Of course, it gets more complicated with the thousands of provisions that affect the basic rates. Let's face it, Congress is flying blind and members will offer any shred of evidence that their particular version of what is best is correct. The only thing I can be certain of is that current government will do everything they can to provide maximum current benefits to constituents while kicking the can of costs down the road.
The problem is the incorrect thought that any of the 3 things you listed does not create economic activity.
If a company hoards (HOLDS) cash they aren't sticking it in a mattress, it could be placed in a number of interest earning accounts. Most importantly, having cash is always better than not having cash, that liquidity enables companies to take advantage of what they view as an opportunity.
Buying back stock again creates economic activity, because there is also a seller on the other end of that transaction, who then has more cash and can do with their money as they see fit.
And is anybody going to think that reducing debt....leverage....isn't a sound financial decision for anybody or any company.
As a side note, I have ready many, many, many articles that clearly state Clinton never ran a surplus. What Clinton did was spend a bunch of money, by federal government accounting standers, that was "off balance sheet," and thus didn't count as federal government spending for the fiscal year. The fact is you can not rely on government number when it comes to pretty much everything.
Here is a pretty good article if you wish to get into the weeds:
http://www.craigsteiner.us/articles/16
Here is a pretty good article if you wish to get into the weeds:
http://www.craigsteiner.us/articles/16
I think we’ve all learned there are worse presidents out there than Dubya. I’d be ecstatic with a Dubya right now. I think 100 years from now Dubya won’t be considered one of the worst presidents, he’ll be a Calvin Coolidge type ie someone people will struggle to remember was even a president. Meanwhile, with Caligula in office we’ve got our Nixon replacement. Nixon who?
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I don't care who does it this trend has got to stop. But then again anyone that tries will be bastardized by the myopic shills, media and members of both parties.
USA Today already took a poll and Dubya lost.
That’s right NOW with both parties propaganda arms blaring about them. 100 years from now Obama will just be the first black President Who avenged 9/11 and not much else will be remembered. I think he’ll settle in to somewhere outside of the top 10 in the 10-20 area. Dubya will be the president who let 9/11 happen, started several wars in the Middle East and maybe would be remembered for the poor Katrina response and nothing else. So he’ll be near the bottom but not one of the worst, probably in the forgettable range of about 5-10 from the bottom. And yes I’m not saying that’s all either did, I’m just saying 100 years from now that’s all anyone will remember/care about.
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