Do Tax Cuts Lead to Economic Growth?

[opebo]

There is also the philosophical argument that a worker should keep most of the fruits of their labor, and be free to choose how to spend those resources as they see fit in accordance with their own individual tastes and preferences.

Firstly, the class to which the rates under discussion here are applied are not 'workers', but rather the privileged (as in privileged relatively by the State at the expense of the workers).

Secondly, to attribute incomes as 'belonging' to an 'individual' is erroneous - all incomes are created by the hive together, with each toiler working ant-like, in tandem.

Finally, 'freedom to choose' and 'individual tastes and preferences' are also highly dubious constructs; in fact these things are also dictated by power.

[opebo]

I don't know if you could make the argument that tax cuts hurt economic growth, but maybe that tax rates don't effect the economy as much as one might expect?

And the reason is - the public/private dichotomy is erroneous. 

[opebo]

....

Fixed.

That schtick is getting old, no one finds it funny.

[opebo]

I've talked to quite a few business owners, and they say that tax cuts make them more likely to hire, so I would say they probably do.

More custom is what makes them hire, Oldie.  Don't pay any attention to what they say - they're liars.

[opebo]

Stretch it back to 1945 and you see massive growth along with the Kennedy tax cuts in the 1960's.

Growth in the 1960s was caused by demand-led Keynesian government-spending growth.

[opebo]

Stretch it back to 1945 and you see massive growth along with the Kennedy tax cuts in the 1960's.

Growth in the 1960s was caused by demand-led Keynesian government-spending growth.

Keynesian government spending growth also occurred in the 1970's with stagflation as the result. But hey I'll take your word for it. I mean it's not like we haven't massively increased government spending in the current recession. If only we had done that, the economy would be booming

You have described three different contexts, friend.  Can you understand that there are different economic problems, not just one economic problem?

In 1960 we already had largely good policy in place ever since the 1930s (high/increasing government spending, highly progressive taxation, high and increasing levels of unionization and thus increasing demand through mass consumption, a side effect of rapidly increasing wages) - and thus the Keynesian boom of the 1960s was just incremental in nature.  It wasn't really the 'solving of a problem' or crisis, rather just the fine tuning of an already well-ordered society.

The 'stagflation' of the 1970s, while enormously exaggerated by right winger in retrospect (in fact the 70s were far better for the bottom 95% of the population than any decade since), was entirely caused by one factor: oil.  Some amount of painful adjustment was inevitable regardless of which economic management policy was in effect at the time - in point of fact 'stagflation' was a very mild ailment and far superior to even the best of all possible worlds under neoliberalism. 

Lastly, the current situation is a debt-deflation depression, analogous to the Great Depression of the 1930s or the 1990s in Japan.  The deflationary 'hole' created by the collapse of capitalism (itself caused by bad neoliberal policy) is very difficult to fill, and would require government spending many, many times the feeble amount which has been spent in the last four years.  What is required is State 'takeover' of a very large share of the 'private' economy, as in WWII.

[opebo]

Post WW2 was a once in a lifetime economic opportunity, combining a drastically reduced labour force, with pent up consumer demand, with the result being wage growth.

So?  'reducing the labor force' can be simply caused by erecting a massive tarrif wall (or of course WWIII would also get rid of a lot of them).

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Nonsense, my ignorant friend.  The deflation to which I refer is that of real property.  The cost of a candy bar or a computer machine is not important.

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No.  Capitalism by definition can only create malinvestment because it inevitably creates excess production and a lack of demand.

[opebo]

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Reduced supply, with similar demand=higher price.

So why did you just say that was a positive after WWII?

Getting back to your original point on even more massive spending being needed to remedy the current situation: US government spending was about 2.9 trillion in 2008 and around 3.8 trillion in 2012. I have two questions for you.

1) About what level of government spending would be appropriate in order to get the economy going again?

It isn't necessary to know the answer to that question beforehand - you just get started increasing spending and only 'stop' when things improve.  Open-ended in other words.

2) How would you avoid austerity in everything when the government cannot afford to service it's debt a few years down the line?

What debt?  We have a printing press, my fine feathered friend.

[opebo]

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Obviously massive die-offs are not positive, but they tend to increase wages, which is positive for the survivors. Hence the wage growth post 1945. The same could be said for the black plague. Not great for the people living in it, but wages increased after.

But you just said reducing supply will increase prices.  You can't have it both ways.  Raising the tarrif wall is the same as a die off, and you objected.  

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Great, please tell me about the morons who will accept rapidly devaluing assets for their efforts. I have some ocean front property in Wyoming to sell them.

Dude, the man with the printing press is also the man with the gun.  The commoners have to accept everything - hence capitalist slavery in the first place.