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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GraceZ who wrote (47659)	12/19/2005 12:31:37 PM
From: gpowell	Read Replies (1) \| Respond to of 110194

That's a good one. I'd sooner believe that thing that Elroy wrote way back on the RE thread, that taxing people at higher rates makes them work harder! Contortionist economics. Strict Ricardian Equivalence simply asserts the equivalence between government debt and taxes, with a key assumption being that agents do not suffer from the Keynesian concept of bond illusion. There is no contortion, simply conclusion following from a given set of assumptions. There is no empirical evidence to support that shifting the mix of taxes and debt has any aggregate economic impact. It appeared that you were making a case for the superiority of debt finance over tax finance and, if so, I would appreciate if you could elaborate on the underlying economic assumptions.