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Thread: There is only one thing that has to be followed in this countries economy.

  1. #61
    A Character Tennyson's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    Yes, you did. You made specific economic statements, that Professor Mankiw flatly contradicted. I don't know how to help you comprehend that any more than I have already tried.

    For example, you have claimed......REPEATEDLY.....that "Reagan's fiscal policy of tax cuts is what made inflation drop". Professor Mankiw, to the CONTRARY, says that "Credit for the reduction in inflation goes COMPLETELY to monetary policy", meaning that fiscal policy gets ZERO credit. And he furthermore adds that "Fiscal policy at this time was acting in the OPPOSITE direction", or, in other words, on its own, would have made inflation WORSE.

    Professor Mankiw is saying, in short, that YOU ARE JUST PLAIN WRONG.

    Is there any way I can make it any SIMPLER for you?!??
    Here is what I actually said in context:

    There was a symbiotic relationship between Volckerís policies, at the behest of Reagan, and the tax rate cuts of Reagan. The tax rate cuts would not have dropped the inflation rate at the staggering rate and pace that it dropped alone and the Fedís policies would not have dropped the inflation rate at the staggering rate and pace that it dropped alone. The rate of inflation dropped significantly along with the tax rates.

  2. #62
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Tennyson View Post
    Here is what I actually said in context:

    There was a symbiotic relationship between Volcker’s policies, at the behest of Reagan, and the tax rate cuts of Reagan. The tax rate cuts would not have dropped the inflation rate at the staggering rate and pace that it dropped alone and the Fed’s policies would not have dropped the inflation rate at the staggering rate and pace that it dropped alone. The rate of inflation dropped significantly along with the tax rates.
    Volcker's policies were NOT undertaken "at the behest of Reagan". If anything, they were undertaken at the behest of Jimmy Carter, the President who 'hired' him, in that it was Jimmy Carter who nominated him to be Chairman of the Federal Reserve. There was a great deal of FRICTION between the Volcker Fed and the Reagan administration in the early years of the Reagan administration, as I already explained, with Reagan's Treasury Secretary James Baker frequently calling on the Fed to lower interest rates. The very high interest rates----with mortgage rates approaching 20% (!!) were 'strangling' the American economy, from the perspective of the Reagan folks, but they were the harsh medicine that was needed to 'wring' inflation out of the economy.

    Your second sentence is simply economically incoherent and makes no sense. Again, fiscal policy had NOTHING to do with the rate of inflation coming down. I have no idea why you are not 'getting' this. Professor Mankiw's explanation is crystal clear on this, and I can find similar explanations in other introductory (or intermediate, or advanced) economics texts.

  3. #63
    Veteran Member cpicturetaker12's Avatar
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    Quote Originally Posted by jbander View Post
    That one thing is wage growth, not economic growth, wage growth, not GDP, wage growth and in no way am I referring to the top few percentage points of our population .This part of our economy, if watched seriously ,for any length of time will find out a few things , one that Reagan's trickle down lie never trickled down and that the reason that there hasn't been wage increase for the working family is all because of the rights Tax rates and laws, they have been written to make sure nothing goes down, WE have had the biggest profits in history by a long shot in those year and only a few people at the top got any part of the increased wealth of the richest country in the world. These massive profits have been forced into the hand of the wealthy, The worker got none the executives and the wealthy got it all.
    So is someone here going to try to tell us that I'm wrong and that the wealthy who got it all in the passed 40 years should have gotten it all, are you going to tell us that the wealthy got , smarter, worked harder, or deserve it all somehow. There Is only one part of our economic growth that should be watched by the people in this country, wage growth of the worker , watching this and studying the reasons and the reality of what is happening in front of you , you will see one thing , The right has set tax rates and laws to force all of the growth into the hands of the select few. That can easily be changed and its not by handing it all to big business and the wealthy like was done by the right wing budget that just passed.
    What WAGE GROWTH? What a quaint notion!

  4. #64
    A Character Tennyson's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    Volcker's policies were NOT undertaken "at the behest of Reagan". If anything, they were undertaken at the behest of Jimmy Carter, the President who 'hired' him, in that it was Jimmy Carter who nominated him to be Chairman of the Federal Reserve. There was a great deal of FRICTION between the Volcker Fed and the Reagan administration in the early years of the Reagan administration, as I already explained, with Reagan's Treasury Secretary James Baker frequently calling on the Fed to lower interest rates. The very high interest rates----with mortgage rates approaching 20% (!!) were 'strangling' the American economy, from the perspective of the Reagan folks, but they were the harsh medicine that was needed to 'wring' inflation out of the economy.

    Your second sentence is simply economically incoherent and makes no sense. Again, fiscal policy had NOTHING to do with the rate of inflation coming down. I have no idea why you are not 'getting' this. Professor Mankiw's explanation is crystal clear on this, and I can find similar explanations in other introductory (or intermediate, or advanced) economics texts.
    Volcker's policies were NOT undertaken "at the behest of Reagan.
    I may have been off with that statement. I should have said "Volcker was only able to keep money tight because of Reagan. If not for Reagan, Volckler would have been gone or forced to loosen the money supply. What Volckler did was 100% dependent on Reagan."

    I have explained how Reagan's fiscal policy was as equally responsible for lowering inflation.

  5. #65
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Tennyson View Post
    I may have been off with that statement. I should have said "Volcker was only able to keep money tight because of Reagan. If not for Reagan, Volckler would have been gone or forced to loosen the money supply. What Volckler did was 100% dependent on Reagan."

    I have explained how Reagan's fiscal policy was as equally responsible for lowering inflation.
    And Professor Mankiw, and I, and countless other economists (whom I have not even yet quoted) are saying that you are JUST PLAIN WRONG.

    I can't get any BLUNTER than that.

  6. #66
    A Character Tennyson's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    And Professor Mankiw, and I, and countless other economists (whom I have not even yet quoted) are saying that you are JUST PLAIN WRONG.

    I can't get any BLUNTER than that.
    I do not know the entire thought of Mankiw on the subject, but regarding the quote, I am saying he is wrong, Volkler says he is incorrect, and the Congress of that time says he is wrong.

  7. #67
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Tennyson View Post
    I do not know the entire thought of Mankiw on the subject, but regarding the quote, I am saying he is wrong, Volkler says he is incorrect, and the Congress of that time says he is wrong.
    Who the HELL is 'Volkler'??? And where is your evidence demonstrating that Congress is saying that Mankiw is wrong? You have provided none. I indicated that I could quote from an enormous number of OTHER economics textbooks saying the SAME thing, that it was MONETARY policy, and NOT fiscal policy, that brought inflation under control in the early 1980's. Fiscal policy is GENERALLY ineffective when it comes to fighting inflation. It is the wrong tool for the wrong purpose. It is like trying to fight off a swarm of mosquitoes with a cannon.

  8. #68
    A Character Tennyson's Avatar
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    Quote Originally Posted by BigLeRoy View Post
    Who the HELL is 'Volkler'??? And where is your evidence demonstrating that Congress is saying that Mankiw is wrong? You have provided none. I indicated that I could quote from an enormous number of OTHER economics textbooks saying the SAME thing, that it was MONETARY policy, and NOT fiscal policy, that brought inflation under control in the early 1980's. Fiscal policy is GENERALLY ineffective when it comes to fighting inflation. It is the wrong tool for the wrong purpose. It is like trying to fight off a swarm of mosquitoes with a cannon.
    You are confusing two seperate arguments. If Congress had their way, Volckler would have been gone or loosened the money supply. Since Volckler and Reagan were working together on tightening the money supply, Reagan is the only reason Volckler was able to do what he did.

    I never stated that either policy dropped the rate of inflation alone.

  9. #69
    Radical Centrist BigLeRoy's Avatar
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    Quote Originally Posted by Tennyson View Post
    You are confusing two seperate arguments. If Congress had their way, Volckler would have been gone or loosened the money supply. Since Volckler and Reagan were working together on tightening the money supply, Reagan is the only reason Volckler was able to do what he did.

    I never stated that either policy dropped the rate of inflation alone.
    1) Congress does NOT have the authority to fire the Federal Reserve Chairman. The President does. Congress does not.

    (2) Volcker (the correct spelling, unlike your mangled spellings of his name) and Reagan were NOT 'working together'. For what is surely at least the third time in this thread, there was a great deal of FRICTION between the Volcker Fed and the Reagan administration in the early years of the Reagan administration, in 1981 and 1982 in particular. Reagan probably in fact came close to firing Volcker in that time frame. Many of his top aides thought the harshness of the Volcker policies was creating a recession so deep that it would prevent Reagan from being re-elected in 1984. It was not until 1983 that Volcker was able to start lowering interest rates, because by then inflation had been decisively vanquished. And then the American economy starting rising like a phoenix from the ashes. Both 1983 and 1984 were years of strong recovery and, as you know, Reagan was re-elected, in an overwhelming landslide, against a candidate who was calling for tax increases, which are NEVER a popular policy. Reagan owed Volcker a huge vote of thanks at that point.

    (3) It is a very good thing that Reagan did NOT fire Paul Volcker. Had he done so, and put in a Fed Chairman who would have "loosened the money supply", which IS what Reagan and his Treasury Secretary James Baker WANTED in 1981 and 1982, the battle against inflation might never have been won, and we would have ended up with a very different economy in the 1980's and 1990's, and presumably beyond, and one much more afflicted with chronic inflation. The entire WORLD owes Paul Volcker a vote of thanks, for BREAKING the inflationary spiral of the late 1970's. He was very unpopular at the time, but he stuck to his guns in the face of overwhelming opposition from people who simply did not understand what he was doing, or WHY he was doing it.

  10. #70
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    Quote Originally Posted by Tennyson View Post
    If what you say is true, the economy would have been booming under Carter and none of this would have happened because of Reagan's tax rate cuts:

    The economy grew by one-third, which was the size Germanyís third largest economy in the world as a result of the tax rate cuts.

    Total federal revenues doubled from just over $517 billion in 1980 to more than $1 trillion in 1990.

    There was a 92 month expansion of the economy, which ended in 1990 after taxes were increased.

    The GDP growth rate for Reagan's term was 4.33%, with a 7.2% in 1984.
    not just garbage but garbage from someone who doesn't exist

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