Posted on 06/21/2008 7:54:11 AM PDT by shrinkermd
Robert Mundell isn't in the habit of making fruitless policy recommendations, though some take a long time ripening. Nearly four decades passed between his early work on optimal currency areas and the birth of the euro in 1999 – the same year he received the Nobel Prize for economics...
...So when Mr. Mundell says that rescinding the Bush tax cuts "would be devastating to the world economy," that oil prices are "not so far off track," that Asia needs its own multilateral currency, or that the ham sandwiches sitting before us could use some mustard, one is inclined to pay attention – and, except in the case of lunch, to think long term.
...One of the original "supply-side" economists, he has long preached the link between tax rates and economic growth. "It's a lethal thing to suddenly raise taxes," he explains. "This would be devastating to the world economy, to the United States, and it would be, I think, political suicide" in a general election.
Should taxes instead be cut again, I ask him, to stimulate the sluggish economy? Mr. Mundell replies that he favors a ceiling of 30% on marginal rates (the current top rate is 35%). He recounts how the past century experienced a titanic struggle over whether tax rates are too high or too low: from a 3% income tax in 1913; up to 60% during World War I; down to 25% before Congress and President Herbert Hoover raised taxes back to 60% in 1932 and "sealed the fate of our economy for a long, long time"; all the way up to 92.5% during World War II before falling in three steps, reaching 28% under President Ronald Reagan; and back to nearly 40% under Bill Clinton before George W. Bush lowered them to their current level.
(Excerpt) Read more at online.wsj.com ...
In the meantime, remember in spite of Obama claiming he is financed by the lumpen proletariat, only 39% of his funds through March were so generated. The rest were big players including PACS.
Remember also, that the top political action committee supporting BHO was Goldman Sachs (a Hoover in the making) and the real power of the RATS--number two was University of California. Harvard came down at 6 or 7.
Those with the money have BHO by the political ________: his heart and mind will follow there grasp.
(On the other hand most do comprehend. They're godless communist doofuses.)
Has there been any politician recently who has tried or been even remotely successful at explaining tax cuts and the relationship to government revenue? The only guy I can think of that has remotely explained it well in short sentences is John Kasich, and he got out of politics. Gingrich can explain it, but he is a “long form” speaker....he gets killed by out of context sound bytes.
1. When your family, friends, etc. refer to "the Bush tax cuts," correct them immediately: "They're not Bush's tax cuts -- they're MY tax cuts. (And yours. And yours....) Get it straight."
2. When they say "Obama's going to get rid of the tax cuts," correct them immediately with, "He's going to RAISE taxes -- on EVERYONE. Calling it 'removal of tax cuts' doesn't change the fact that he's RAISING taxes."
See Hauser’s Law....
But there are greedy politicians that understand tax policy. That’s why they have proposals like Charlie Rangels’ 4% surcharge, Value Added Taxes, and imputed taxes.
ping
ping
Tax cuts should be called revenue generators. We don’t have to pay for tax rate reductions, they more than pay for themselves. Every time they’re reduced, lower tax rates lead to more revenue for the government.
The far left considers Zimbabwe the model to be followed. They view it as a success story. Sure the people are starving. But so what? There is equality in that.
“Obama and his ilk would consider a global economic crash to be an achievement. The first step in restructuring the world into a worker’s paradise. “
You are correct. FDR milked a Great Depression that he helped lengthen through his awful policies to keep govt growing. He was politically successful because there was no ‘credible’ alternative.
Economic distress makes people insecure and that makes them flock to socialism. The socialists will claim (wrongly) that it is the failure of the market, but in fact govt is responsible for most of our ills.
Reaganism got us out of that rut for 25 years, but we forgot all about the real lessons and are now in risk of being in the vicious cycle of poor economy -> bad politics.
I BELIEVE MUNDELL IS RIGHT. We have had global growth for 20 years, and we could easily have a global slowdown should USA fold up over the Democrats horrid economic policies.
There is an irony about President Reagan utilization of Robert Mundell’s economic views. The irony is that President H. W. Bush, President William Clinton, and President G. W. Bush all used Robert Mundell’s Nobel Prize winning economic policy.
In simple terms, Mundell’s economic policy increases tax rates to slow inflationary growth and decreases tax rates to stimulate economic growth. Periodic interest rate adjustments fine tune the effect on growth between tax changes. This policy moderates the extremes of the normal and expected business cycle with appropriate influences. Barrack Obama’s election to President may quickly change this. Obama seems to be one of those leftover socialist who still think a nation can tax itself into prosperity.
"We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle." Winston Churchill
thanks, bfl
Thanks neverdem.
.....and Obambi socialism would push us further down that graph line toward the lower right.......
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