Posted to the blog, angrybear.blogspot.com, a debate among economists over whether you can be compelled to work harder and longer if government increases its burden on you. Or, whether you can be convinced to work harder and longer by reducing your taxes:
“How hard are you willing to work to keep that Bass Boat and the Lake Cabin even as the taxes on them are “killing you”? Are you really going to cut back your overtime in response to a tax increase if it means giving up your Season Ski Pass?”
Our response to the debate was short and sweet:
This is truly an astonishing statement.
The idea that people can be led to work themselves harder in order to offset the burden of government – which, I suppose, can be extended to inflation as well – reveals the depth of cruelty inherent in mainstream economic policy.
It really does not matter whether tax cuts or tax increases will make people work more, it is just horrifying economists would be debating how government might get them to work harder – even as 9.4 million are collecting unemployment.
This is just incredible!!
Shame on you.
To which we felt it necessary to add this addendum:
AM I THE ONLY ONE WHO THINKS IT IS NOT THE ROLE OF GOVERNMENT TO CONVERT SOCIETY INTO A PRISON HOUSE OF LABOR – NO MATTER THAT THIS GOAL IS ACHIEVED BY REDUCING TAXES OR INCREASING THEM???????
THIS DEBATE IS AN OBSCENITY!
Obama’s sleight of hand…
Posted in General Comment, economics, political-economy, politics with tags Barack Obama, Depression, economic collapse, economic policy, why economists suck on July 13, 2009 by charley2uWe just woke up to the fact that the entire Obama stimulus plan is a farce – a ploy designed to create the impression Washington was going to “spend like mad” to fight this downturn.
The aim of this ploy was pretty simply: If we believed Washington was going to spend a lot of money, we would go out and spend a lot of money in expectation of Washington’s spending.
In another example of this idea, the Federal Reserve has greatly expanded the amount of money on its balance sheets. This creates the impression among the investor class that trillions of new dollars will come flooding into the market to push up prices – creating hyper-inflation.
The economists around Obama – Summers, Romer, etc. – believe such expectations can change your behavior. According to the theory, if we expect, for instance, inflation to be very high in the near future, it might make sense to buy a house or put money in more risky assets. The same can be said for government stimulus: If we think the government is going to spend a lot of cash to stimulate the economy, we might be less fearful of losing our jobs, and more inclined to buy that 42 inch wide-screen high-definition plasma television.
According to reports in the media over the last few months, this was the projected schedule of stimulus plan spending:
As you can see, most of Obama stimulus spending comes in 2010, and the following years. Which, we thought, is odd, since this chart below is the likely projected course of the Great Recession, according to estimate by Obama’s economic advisers:
As you can see in this chart, with his stimulus plan (dark blue line), Obama’s team expected the recession to peak in late 2009, and for unemployment to be falling as we headed into 2010.
If this projection is true, why was the bulk of the stimulus spending loaded to the back end of the recession, when unemployment would have been falling, and economic conditions improving?
We think the answer is simple: It was a con game from the very beginning.
The con was to announce a really huge number in the press – a headline number – which would grab your attention, $878 Billion, but to quietly shelve the spending plan after you, inspired the flood of new spending which would be coming into the market, ran headlong to the mall to join Washington’s orgy of consumption.
Barack was going to take you to the mall, and abandon you there…
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