Do Tax Cuts Lead to Economic Growth?

[DC Al Fine]

Probably not at today's rates. In the 1950's and 60's, absolutely. The graph there is horribly misleading since it only shows data from the 1990's. Stretch it back to 1945 and you see massive growth along with the Kennedy tax cuts in the 1960's.

[DC Al Fine]

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

[DC Al Fine]

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. Also, you contradict yourself. There were massive cuts as soldiers came home in the mid 1940's, yet there was no massive depression. By the same token, government spending as a percentage of GDP was greater in the so called "neoliberal" Reagan years than it was throughout the 1960's or 1970's.

Furthermore you are either ignorant or outright lying when it comes to your claim that the current recession in the USA is deflationary. Inflation certainly decreased over the 2000's but it didn't drop below zero. In fact the real inflation rate is probably higher than the low numbers since CPI's core inflation excludes items with prices outpacing inflation. The end result of Keynesian policies is too many dollars chasing not enough goods and services and malinvestment to boot.

[DC Al Fine]

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Reduced supply, with similar demand=higher price. My point is that my little cousin could achieve fairly reasonable economic growth if you made her treasury secretary in 1945. Keynesianism had nothing to do with it. Furthermore Keynesianism is suspect due to it being implemented in the 1930's and taking a massive war and the best economic conditions ever to get decent growth.

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Housing makes up 15-20% GDP correct? It seems that computers, food, gas, and everything else make up a huge part of the decline in real incomes.

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Yes because the Soviet command economy was SOOOO efficient and good at creating prosperity.

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?

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

[DC Al Fine]

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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.

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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.

[DC Al Fine]

I disputed that the income tax structure was good for the economy, not a tariff wall.

As for your monetary policy, around 25% of US treasuries are held by foreigners. If the US hyperinflates it's debt, all that is gone. The elites sure won't take negative returns, so they're gone. Now let's try and force the working classes who take home $30 000 a year to finance that multi trillion deficit. I give you maybe 3 years before Canada and Mexico walk in split America between them.