***Official Political Discussion Thread***

[RustyShackleford]

@gry60 and RustyShackleford you guys touch on the exact reason why trickle down economics don’t work, and why it’s more effective to empower the bottom 90% as opposed to the top 10% if your true goal is sustained economic growth. The vast majority of consumers are the 90%, and are far more reliant in consuming goods than the 10%.

This paper is pretty technical but it does a good of what happens during times when the bottom 90% of earners experiences tax relief vs the top 10%.

The conclusion of the paper summarizes the point well.


“This paper quantifies the importance of the distribution of tax changes for their overall impact on economic activity. I construct a new data series of tax changes by income group from tax return data. I use this series and variation from the income distribution across states and federal tax shocks to estimate the effects of tax changes for different groups. I find that the stimulative effects of income tax cuts are largely driven by tax cuts for the bottom 90% and that the empirical link between employment growth and tax changes for the top 10% is weak to negligible over a business cycle frequency. These effects are not confounded by changes in progressive spending, state trends, or prior economic conditions. The effects seem to come from labor supply responses as well as increased consumption and investment.
These results are important for characterizing central equity-efficiency tradeoffs in tax policy. If policy makers aim to increase economic activity in the short to medium run, this paper strongly suggests that tax cuts for top-income earners will be less effective than tax cuts for
lower-income earners. While it is possible that tax cuts for top-income earners have sizable long-run impacts through different channels such as human capital investment, firm creation, or innovation,much more compelling evidence on these channels is needed to support top- income tax cuts on efficiency grounds, especially given the magnitude of resources devoted to these tax policy changes. Overall, the results not only suggest some skepticism for “trickle down” economics, but they also provide evidence that supply-side tax policies should do more to consider the relative efficacy of tax cuts targeted lower in the income distribution. Finally, as a note of caution, the estimates in this paper come from modest changes in tax rates that have been executed in the post-war period; using these estimates to evaluate the likely impacts of large tax changes on high-income earners requires extrapolation beyond the observed variation in the data.”

https://www.nber.org/papers/w21035.pdf

-Thanks I will check it out later.

-When trickle down economics was first pitched, some wanted to pitch it as a demand side plan.

In that if we cut the taxes of the rich they would go on spending binges and buy up so many goods and services it would stimulate the economy. The would buy two more cars, yachts, hire nannies, cooks, and gardeners, they would get out more and have more money to put toward charities.

The argument was view as so ridiculous it never gained traction. Instead it was a better play to paint the rich as altruistic job creators that would surely do right by the common man and share in the economic prosperity if they were free from the oppression of high taxation.

The fact so many people still beleive this nonsense proves trickle down economics is one of the greatest scams ever ran.

 

[dwalk31]

What you choose to address is very telling.

You too

Paid off over 100k in loans and i am all for forgiving them. I know how much that would have changed my life at the time and how much it truly handicapped me when i came out of college and lived at home for free and was paying $1,150 per month to Sallie Mae on my $33k per year salary

Yea I have absolutely no issue with people receiving loan forgiveness. Hope it works out.

 

[frenchbreadbuilds]

And I’m no Economist either. But I don’t have to bend statistics to prove a point history has already proven time after time and is in the process of being proven AGAIN. A tax cut for the rich and corporations that doesn’t mandate employee reinvestment and wage growth is welfare to the rich. Plain and simple.

 

[IATT]

 

[rexanglorum]

If you're against Warren's plan and you never had student debt because your parents paid your tuition, ****

If you're against Warren's plan because you had to pay off student loans and you say "I paid off my student debt" and you graduated from UCLA is 197X and that debt was $120 lab fee and your first job paid the equivalent of $75,000, ****

If you graduated more recently and you had the large debts that have become typical and you got a decent paying job but still had to supress your consumption to pay off those loans early, let's talk.

In some respects, the system worked, you got a job that pays enough money to pay off those loans. The conceit of student loans is that college will help you make much more money than you would make without that education. Nevertheless, paying off loans ahead of schedule necessarily required self imposed austerity relative to how you could have lived with the income you had after college.

So yeah there should be a reward, even if it might just be phased out tax credits, let's do it. Student debt shouldn't exist. It should not exist going forward, the existing student debt should be retired and those who were harmed by student debt, who paid it all off, should get some sort of mini reparations for that. That's the moral case. There's more prosaic economic argument. A new graduate who made a good starting salary delayed buying a home, buying a car, saving for retirement in order to pay off those loans. So, let's turbo charge the acquisition of those middle class milestones for those who are now five to fifteen years out of school, student debt free but behind where they would be if they had no debt in the first place.

 

[boris]

You too

Excellent deflection as always.

 

[noskey]

I paid back damn near 40k in loans, plus an extra 10k for my sister. I can't even lie, even though I support this plan wholeheartedly a single salty tear gonna roll down my cheek if it passes.

My girl has like 60k is loans left to pay, so she just became Warren's biggest fan.

Also I have noticed a ton of my liberal friends being against this because they are extra salty and feel if they had to pay theirs off, it is not fair other people get theirs written off. While I empathize I gotta break it down to them how good this will be for the economy. One of my homies that works at a car dealership and he paid off a ton of loans was vehemently against this when I talked to him last night. When I told dude "what did you think millennials with an extra $300-500 dollars in their pocket every month will spend that money on". His reaction...

Dude got wet at the thought of all dem extra whips he might sell.

If Elizabeth gets nominated I'm paying all my non-voting friends to vote.

 

[elpablo21]

Seems legit

 

[Belgium]

The peasants calling themselves the free press should beg on their knees for forgiveness from his Holy Excellency Supreme Grand Emperor Trump.


The president seems rather angry and bitter after supposedly getting a “complete exoneration.”

 

[rexanglorum]

We can never underestimate how intertwined appeals to deregulation, low taxes, austerity and "free markets" are with resentment politics. Advocates of capitalism tout the rewards that markets can bestow on merit but the far less emphasized corollary is that the market punishes people who are slackers, deviant, unworthy.

This resentment is especially easy to push in a Country like the US that is both a settler-colonial empire and the only developed country that had a radicalized slave economy inside its borders (other European countries had slave societies but in their colonies not inside their home borders). However, it is not unique to the US and the advent of neoliberalism in the 70's and 80's was not unique at all. European Countries that are or that were, until recently very racially homogenous, started to embrace neoliberalism as a response to the liberation movements of the 60's and early 70's.

Women, gay people, young people gained real practical freedom as social democracy gave them more and more material freedom. It does undermine the family unit and it allows alternative lifestyles and aesthetics as social democracy grew and decentered regimented wage labor in people's lives.

The desire to reduce or eliminate social democracy means that the market and bosses can assert the social discipline that they were able to before social democracy came into being. While propoents of supply side economics, until recently, had to make a utility maximizing case for for it, the impetus, from the very beginning, was reactionary desire to restore the tradition power structures that existed before mid 20th century social Democracy and before the World Wars.

 

[blastercombo]

The peasants calling themselves the free press should beg on their knees for forgiveness from his Holy Excellency Supreme Grand Emperor Trump.


The president seems rather angry and bitter after supposedly getting a “complete exoneration.”

Dude describing sex with his kid again?

 

[aepps20]

Typical Libbie Socialism. Libs just want free stuff. Free food, free education, free healthcare and free coal. They aren't willing to pay the Iron price and dig up coal the old fashioned way. Makes me SICK. #BLACKLUNGS4TRUMP, #KANYEGETSIT, #THEONISREEK

 

[dacomeup]

 

[elpablo21]

 

[boris]

I'm assuming the "old days" he's referring to were the ones where wages weren't stagnant and the average person had more buying power.

 

[dwalk31]

Sanders says the right to vote should be extended 'even for terrible people' like Boston Marathon bomber

https://www.cnn.com/2019/04/22/politics/bernie-sanders-voting-rights/index.html

Interesting discussion about the right to vote. I think it is a worthy discussion and it is good that Bernie is starting the conversation.

 

[elpablo21]

Do we have dissension in the coal ranks brehs??? Who is this traitor?

 

[boris]

Do we have dissension in the coal ranks brehs??? Who is this traitor?

We're still waiting on their super amazing healthcare plan.

 

[dwalk31]

Do we have dissension in the coal ranks brehs??? Who is this traitor?

This, too, is an interesting issue. There seems to be a conservative strategy--pushing the idea that college is not for everybody. And advocating trade schools, junior colleges, etc. as a viable alternative.

I am not comfortable with that position as I think that traditional university education offers several opportunities for growth beyond the classroom and potential job offers. I also think that the anti-university agenda only increases the income inequality, especially in communities of color.

I don't know if student loan forgiveness is the answer, but I am not opposed to the concept. Especially as a form of targeted reparations for communities of color. Warren's plan makes sense, but it is a scaled phase out after a household income 100k. We'll see how it turns out.

 

[Belgium]

It seems, and correct me if I am incorrect, that you disagree with my principle conclusion that the US economy has progressed under this administration. And you would instead use the word improved? That's fine, I am okay with saying improved instead of progressed.

That's...not really what I wanted to get across. I answered your question and explained how I define progress and briefly explained some other factors I was looking at. You can use whatever words you please, I'm not here to stop you. In fact I suggested you or anyone else shouldn't shy away from participating in economics discussions because of lacking an economics degree.

Essentially, my initial reply to your post was a very narrow point I took issue with. It wasn't your use of the word progress and whether or not I agreed or disagreed with it, for the record. That's why I specifically refrained from opining on that in my initial reply.
The narrow focus of my initial reply was that I strongly disagreed with the act of drawing a conclusion of any kind on the economy based off just 1 or 2 simplified factors, which in your case was a decline in the unemployment rate and people paying less taxes. That was the narrow point I focused on, but perhaps didn't make clear enough.

There are many factors affecting the economy, some with more or less impact than others. My narrow argument was that it is important to examine a variety of factors to draw an informed conclusion on an expansive topic such as economics. That's what I wanted to make clear, the content of your conclusion was besides the point and I declined to address it in my initial reply for that reason.

 

[dacomeup]

 

[dwalk31]

That's...not really what I wanted to get across. I answered your question and explained how I define progress and briefly explained some other factors I was looking at. You can use whatever words you please, I'm not here to stop you. In fact I suggested you or anyone else shouldn't shy away from participating in economics discussions because of lacking an economics degree.

Essentially, my initial reply to your post was a very narrow point I took issue with. It wasn't your use of the word progress and whether or not I agreed or disagreed with it, for the record. That's why I specifically refrained from opining on that in my initial reply.
The narrow focus of my initial reply was that I strongly disagreed with the act of drawing a conclusion of any kind on the economy based off just 1 or 2 simplified factors, which in your case was a decline in the unemployment rate and people paying less taxes. That was the narrow point I focused on, but perhaps didn't make clear enough.

There are many factors affecting the economy, some with more or less impact than others. My narrow argument was that it is important to examine a variety of factors to draw an informed conclusion on an expansive topic such as economics. That's what I wanted to make clear, the content of your conclusion was besides the point and I declined to address it in my initial reply for that reason.

We don't disagree. My point in saying that I am not an economist was to illustrate that I have a limited scope of knowledge as it relates to the variety of factors used to draw an informed conclusion on an expansive topic such as economics. So, I focused on big picture concepts that are typically used as indicators of economic progress (or improvement to use your word).

It appears you did not have an issue with the ultimate conclusion, but moreso with me showing my work on how I got to it. That is why I conceded early that my scope of knowledge on economics is limited and I relied on traditional indicators (unemployment rate, etc.). If you, or someone that works in the field, think it is ill-advised to rely on these traditional indicators I have no issue deferring to those more informed than myself on the subject.

 

[Nike Jordan]

Do we have dissension in the coal ranks brehs??? Who is this traitor?

 

[Belgium]

We don't disagree. My point in saying that I am not an economist was to illustrate that I have a limited scope of knowledge as it relates to the variety of factors used to draw an informed conclusion on an expansive topic such as economics. So, I focused on big picture concepts that are typically used as indicators of economic progress (or improvement to use your word).

It appears you did not have an issue with the ultimate conclusion, but moreso with me showing my work on how I got to it. That is why I conceded early that my scope of knowledge on economics is limited and I relied on traditional indicators (unemployment rate, etc.). If you, or someone that works in the field, think it is ill-advised to rely on these traditional indicators I have no issue deferring to those more informed than myself on the subject.

Like you, I do not have an economics degree either.
There are other factors like the ongoing trade war and 2019 US economic growth forecasts, both of which I think you'll agree are important in assessing the economy but were not mentioned as part of the indicators you took into account.
It's not that you shouldn't rely on those indicators, it's that you should rely on additional indicators that would help you in determining your assessment.


Either way I think we have resolved the argument. Think of my argument in other situations as well.
If someone is running a business, that person has to examine a wide range of factors to asses the health and productivity of the company.
Drawing a conclusion based on just a limited part of those factors would result in an incomplete assessment.

In many situations, economics included, there are plenty of factors the average person can take into account that do not require a degree in that subject or even a high level of knowledge on the topic at all.

Regarding economics, the best example of this is growth projections. An average person without much knowledge in economics will still be able to easily digest growth projection reports, which are typically concise and not littered with technical terms. They can then cross-reference one set of growth projections with those of other projections.
I can compare my bank's 2019 growth projections for the US economy with the projections report from the Congressional Budget Office (CBO) and then further compare with for example Goldman Sachs' report on 2019 US economic growth projections. While the average person likely struggles to understand how those projections were calculated, such reports still offer a great deal of information. Those projection reports generally explain key factors that influenced their projection one way or the other. In 2019 US growth projection reports you will repeatedly see the report citing factors like the effects of the ongoing trade war, a fading effect of the stimulus, ...

I do not have an economics degree as mentioned earlier, but I can learn a lot from the reports my bank provides to me and the briefings I get from my investment manager at my bank.
I have a substantial amount of money invested, and thus I indirectly stand to benefit from a good US economy. If you've paid attention to the Eurozone economy recently, you'll note it's not going so well.

I've made no secret of the fact I want your president out primarily because some of his actions negatively impact my personal finances, particularly his unilateral trade war.
There is no evidence to suggest Trump knows anything about a trade war, at least judging by his own words; "trade wars are good and easy to win."
Obviously that's far from the only thing I strongly dislike about Trump but I do believe I have a financial interest in seeing Trump/the GOP out of office.

 

[IATT]

Do we have dissension in the coal ranks brehs??? Who is this traitor?