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To: jttmab who wrote (14684)	6/11/2002 7:51:51 PM
From: TimF	Read Replies (1) \| Respond to of 21057

And even if there would have been higher growth and Greenspan didn't do anything about it. I think you could make a pretty good argument that a higher growth rate would have been a worse result. There was a lot of growth in the 90's that was funded with debt. If there was more investing occuring as a result of this hypothetical growth then you could make a reasonable hypothesis that the additional investment would have been funded with even more debt, resulting in a larger crash then we've seen to date. With lower taxes there would be more resources to use to invest. In the late 90s you had an unsustanable buble that probably would also have happened with lower tax rates but allowing more resources to go to the private sector instead of the public sector would have produced more solid investment as well as more high flying bubble companies. You mean like the Savings and Loan deregulation. Deregulation of the energy sector has had it's problems. It's not terribly clear to me that deregulation of the airlines has been swell. The savings and loans where deregulated while still keepingthe government responsible for making up lost deposits. Perfect example of moral hazard there. Or to put it another way a perfect example not of deregulation in general but of foolishly planned and executed deregulation. Deregulation of the airlines has allowed ordinary people to be able to afford flying. You've made my case here. There's lots of other factors that have more impact then mere marginal tax rates. The fact that there are lots of other factors doesn't mean marginal tax rates are not a factor, sometimes even an important one. Higher tax rates do discourage investment and tilt it towards tax shelters rather then the most productive investments. That doesn't mean that a country can not prosper after a tax increase just that it will need the other factors to be heavily in its favor. Personnally, I've found it more complex than that. Europe also has universal health care and a population that lives longer. There cost of health care delivery is substantially lower than that of the US on a per capita basis; which is not an insignificant contribution to the GDP. There universal health care often means that instead of straining to pay for medical care, you strain to pay the taxes, while you wait in line for non urgent care. A dispropotionate share of medical advances happen in the US and the care available here is so good that people who can afford it often come from other countries to get it, sometimes from Europe. The US is simply wealthier then Europe. Compare the per person wealth between the US and the EC and you will see a big difference by any of the normal ways of measuring wealth or income or production. I made a claim that the 90's largely disproved your claims of the advantages of lowering tax rates and then you 'took exception' to that by claiming that it hasn't been true over the last two decades; de-regulation; improvements in technology; and monetary factors were all stronger drivers than lowering the marginal tax rates. I said a lot more then that. But even that is an effective challenge to your claim if your claim is that you largely disproved the idea that lowering tax rates is economically advantageous by showing that in one country over one decade (really less then one decade) the economy grew strongly even after taxes where increased. Even if I had no other explanation for the economic growth that occurred its nonsense to claim that such a limited sample "largely proves" anything. The fact that I did come up with reasons why the economy could grow strongly even after the tax rates increased makes the support for your claim even weaker. Tim