[Torie]

Supply side economics is way oversold at the rates we are talking about here (the Kennedy cut and the Reagan cut were when rates were much higher, and the guy's assertions in that regard upon full examination don't really pan out), but there is one demonstrable flaw in the writer's argument. The cut on dividends and capital gains has boosted the stock market before our very eyes by about 20% (I think that is the major factor in the runup), and thus folks have more paper wealth, and will spend more. The market obviously think that these cuts will be renewed on the sunset date.

[Jhoffa_]

I sometimes wonder how much benefit tax cuts will be when manufacturing & tech is overseas.

You cut taxes, so people have more to spend. The money is spent on goods from china (or where ever) the companies who's products you purchased with said tax cut dollars now pay to expand/modernize operations & hire people.. In china, but not here.

Sure, people still have jobs transporting, stocking and selling the stuff.. but many of those are relatively low paying positions.

When the smoke clears, I wonder how things will fare for future economic stimulus/tax cut packages.

?

[Scenic Sounds]

Supply side economics is way oversold at the rates we are talking about here (the Kennedy cut and the Reagan cut were when rates were much higher, and the guy's assertions in that regard upon full examination don't really pan out), but there is one demonstrable flaw in the writer's argument. The cut on dividends and capital gains has boosted the stock market before our very eyes by about 20% (I think that is the major factor in the runup), and thus folks have more paper wealth, and will spend more. The market obviously think that these cuts will be renewed on the sunset date.

I agree with nearly all of that. However, I'm not sure about the relationship between the tax cuts on dividends and the recent rise in stock prices. Has anyone attempted to correlate the rise in individual stock prices with dividend ratios?

[jwalsh07]

Yup, that is a fact.

[Dianna]

Supply side economics is way oversold at the rates we are talking about here (the Kennedy cut and the Reagan cut were when rates were much higher, and the guy's assertions in that regard upon full examination don't really pan out),

Yes, the rates were much higher during Reagan and Kennedy, but weren't the deductions MUCH higher then also? Does this help close the gap?

Funny thing is that, aside from my mother (who is politically aware), NO ONE else I know even knew that the cut had been passed! Certainly none of them had any idea rebate checks were coming out. Within 10 minutes of making them aware of the rebate, they had a plan for spending the money :)