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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: RetiredNow who wrote (531300)	11/21/2009 12:15:29 PM
From: i-node	Read Replies (3) \| Respond to of 1574745

Very good point. I've argued the same myself in the past. The Laffer assumes as its objective that we want to maximize gov't revenues. I'd say that our real objective is make gov't as small as possible, while still ensuring it is as effective as possible. Sorry, but this statement reflects a blatant misunderstanding of the Laffer Curve. The objective need not be maximizing revenue. But maximizing revenue HAPPENS to occur on the Laffer Curve at about the same time you maximize economic growth. Which IS a good thing. It is economic serendipity. When you cut taxes, you get economic growth. When you get economic growth, tax total gross earnings increase such that even with reduced tax rates, you collect more money. The objective need not be collecting more money; it is a by-product of economic growth. Just like after Clinton/Gingrich cut taxes in the late 90s. The fact is that we're going to need a combination of tax increases and cuts in spending to get back to ZERO deficits. There you go again. If you increase taxes, what happens to economic growth? You kill it. Look what happened when Clinton increased taxes in 93. We were on a trajectory that should have seen strong growth, and it killed it, overnight. Look what happened with Bush 41 violated his "no new taxes" pledge. THE NEXT MONTH THE ECONOMY COLLAPSED (I remember it like it was yesterday). The very next month. We all want fiscal discipline. I can assure you I'm first in line to want to see deficits reduced and to see us paying down the debt. This guy is not taking us there.

To: RetiredNow who wrote (531300)	11/23/2009 12:58:53 PM
From: TimF	3 Recommendations Read Replies (1) \| Respond to of 1574745

The Laffer assumes as its objective that we want to maximize gov't revenues. Not really. It doesn't talk about objectives at all, but close enough, it talks (in extremely vague terms) about what point might maximize revenue. The fact is that we're going to need a combination of tax increases and cuts in spending to get back to ZERO deficits. Not really. Durable restraint on spending growth would be enough, without a single actual cut, or tax increase. Beyond that I'd also make some cuts, but I'd mostly rely on slowing future increases. Also zero deficits aren't really necessary. Just much smaller deficits. OTOH maybe zero deficits should be our goal since its an easier idea to push ("deficits less than x percent of GDP", or "deficits that cause the debt to increase less than the long run rate of economic growth", are hard ideas to get people to rally around), and also if we aim for zero and don't quite make it we have small deficits, while if we aim for small and don't make it we might have moderate to large deficits. Fiscal discipline will do more for this country over the long run than anything else. To me fiscal discipline is more about restraining spending than lower deficits. Not that lower (or zero) deficits are aspects of the issue, but lower spending (or lower spending growth) directly contributes to lower deficits, and is also a fiscal disciple issue in and of itself. If we doubled taxes, and increased spending so as to have an exactly balanced budget, I would say the change was an example of lack of fiscal discipline.