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Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: Dayuhan who wrote (13089)	10/19/2003 10:07:09 PM
From: Lazarus_Long	Read Replies (2) \| Respond to of 793559

Is that really the way it happened before? I see no causative connection between tax cuts and growth. Certainly there is no empirical evidence of any such connection. I took data from 1947 to 2002 from these series infoplease.com eh.net and computed the total surplus of deficit as a percent of total receipts and also year over year GDP growth and plotted them. The plot seemed to show a correlation between running a deficit and GDP growth. I then computed a correlation of coefficient for there ratios. It was -.48. Not fantastic, but not zero either and it confirms that a deficit seems to cause economic growth, at least short term, just as the Keynesians claimed. (Long term could be quite a different matter. Maybe. What the data shows is that we've run deficit better than 50% of the time and still had phenomenal growth.) I won't begin to attempt to argue your comments about waste in the military, although blaming warmongering Presidents or the military for this is simplistic. Congressmen love bases in their districts and scream if they're closed, even if they're totally useless. Another classic case was Senator Byrd getting a second naval observatory atomic clock in VA in spite of Navy protests that they didn't need it and did not want to have to dedicate funds to operate it in the future. Byrd got his way. A return to reality is going on, which after the hallucinatory era of the late '90s probably seems devastating. Yes. Oz was wonderful when we were in it, but it's back to Kansas now.

To: Dayuhan who wrote (13089)	10/19/2003 10:52:41 PM
From: Lizzie Tudor	Read Replies (1) \| Respond to of 793559

Is that really the way it happened before? I see no causative connection between tax cuts and growth. Certainly there is no empirical evidence of any such connection. I meant that Clinton had growth on his side to get out of the prior Bush's deficit. He also raised taxes somewhat but that would not have covered the deficit given the early 90s GDP. As far as labor force devastation, all I can say is that this is the first 3 year period since the depression where the US has lost jobs overall, 2.5 million jobs actually. So things are definitely not good in the labor force. We have had severe recessions before... the early 80s Reagan recessions especially come to mind, where "unemployment" (an indicator that is now worthless) hovered at 12%... we did not lose 2.5 million jobs during that period, this is the first time.