economic nobel prize winner advocates cutting taxes

[spinningfreemanny]

Mr. Prescott is a economics professor here at ASU who just won the
nobel prize in economics, the first nobel for the university...smart sounding guy; I just heard him on the radio yesterday.


Nobel laureate calls for steeper tax cuts in US

Mon Oct 11, 5:21 PM ET Politics - AFP


WASHINGTON (AFP) - Edward Prescott, who picked up the Nobel Prize for Economics, said President George W. Bush (news - web sites)'s tax rate cuts were "pretty small" and should have been bigger.


AFP/Royal Swedish Academy of Science-HO/File Photo



"What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.


"Tax rates were not cut enough," he said.


Lower tax rates provided an incentive to work, Prescott said.


Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.


The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve (news - web sites) Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.


But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.


Bush, who is fighting to get re-elected November 2, has cut taxes by about 1.7 trillion dollars during his term.


The US leader accuses his Democratic rival John Kerry (news - web sites) of favoring tax increases, despite Kerry's promise to cut taxes for everyone earning less than 200,000 dollars a year.

[vidcc]

how does he suggest reducing this record defecit?


Lower tax rates provided an incentive to work, Prescott said.

i would have said the need for housing, food, healthcare, clothes etc. was a bigger incentive....wouldn't you?

[Busyman]

how does he suggest reducing this record defecit?

i would have said the need for housing, food, healthcare, clothes etc. was a bigger incentive....wouldn't you?
You know vid I was contemplating quitting my job because I'm taxed so much. :lol: :lol: :lol:

[3RA1N1AC]

a Nobel Prize for Economics... bleh. not to suggest that someone who receives an Economics Nobel isn't a competent mathemetician or theorist, but the field of economics is so homogenous and predictable in the general thrust of its theories and philosophies (another theory guaranteed to maximize portfolios? YAWN), so questionable in its cultural value (why not have prizes for Gambling & Voodoo, while they're at it?).

news flash: an economist who advocates tax cuts is nothing out of the ordinary. economists want tax cuts, bears want to eat honey and crap in the woods, etc. it's inherent to their nature. :P

they oughta axe the Economics Nobel and introduce new prizes for scientific & medical fields (or "sub-fields," even) where real discoveries and innovations are being made all the time and fought over with great passion; and for 21st century art/media forms that are making important cutting-edge contributions to the development of our culture.

[spinningfreemanny]

the field of economics is so homogenous and predictable in the general thrust of its theories and philosophies (another theory guaranteed to maximize portfolios? YAWN), so questionable in its cultural value

Really? I'm under the assumption that it is quite the opposite; and economists almost never agree with each other...

[DirtyDan]

The US leader accuses his Democratic rival John Kerry (news - web sites) of favoring tax increases, despite Kerry's promise to cut taxes for everyone earning less than 200,000 dollars a year.

Thats not a tax cut, its a financial adjustment and weight shift. Kerry said himself that he will be spending more, and taking it from the rich. Thus, a tax increase. So just because you get a lighter tax bill doesnt mean inflation wont stab you in the back. I mean, we all know the richest *can* be the greediest (for how else does one become rich? an honest living? :p) So someone will be paying, whether its directly through taxes or by that next twinkie you shove in your face that cost's 10 cents extra because the greedy basterdous company didnt want to loose any money.

[3RA1N1AC]

the field of economics is so homogenous and predictable in the general thrust of its theories and philosophies (another theory guaranteed to maximize portfolios? YAWN), so questionable in its cultural value

Really? I'm under the assumption that it is quite the opposite; and economists almost never agree with each other...

they don't agree with each other on specifics, like whether the economy is up or down on a particular day, whether a particular politician is doing all he can do to help encourage activity/growth, or what particular reason accounts for people spending more or less money than usual during Xmas shopping season. i mean that differences in modern economists' basic values and sense of priorities are relatively minimal. most bears will agree that eating honey and crapping in the woods are very important.

to contrast: when a question is unresolved in a field like astronomy, theories about nearly every aspect of the thing in question differ greatly. this consequently affects ideas about a whole slew of other things that are related to the first thing. like big bang theory vs steady state theory, is the universe infinite or finite?, is gravity or expansion the dominant force that shapes space?, do planets exist outside of our solar system?, what kind of planet is necessary in order to support life?, etc. big questions concerning the fundamental nature of space, time, and our place in them are continually posed and answered in that field.

economists may not all look at a chart and see the same thing. but in the "mainstream" they mostly agree on the basic rules, like... tax-cuts are good, we need to stimulate this or stimulate that, we need to grow this or grow that, competition is good, monopoly is bad, luxury and disposable income should be top priorities for a society because the virtue of individual self-interest is a given, etc. the minor differences in opinion seem to have lots to do with economists' allegiances to particular groups and institutions. it's impossible to prove or disprove economic theories, so that's where politics and faith come in: whose side they're aligned with, rather than how they believe an economy functions or ought to function.

from an interview with a winner of the Nobel Prize for Economics:

Reason Magazine: Are those kind of mistakes still made among professional economists?

Milton Friedman: If you look at the views of the profession as a whole, no. There's a great deal of agreement among economists, contrary to what people may think. You won't find much difference of opinion on the proposition that raising the minimum wage will cost jobs. You won't find much difference of opinion on the desirability of free trade. And you won't find any difference of opinion on the idea that you cannot have inflation without monetary expansion. There's no doubt that there's very widespread agreement about those simple ideas.

Reason: How do you make that consensus spread to the general public?

Friedman: You just have to keep on trying to do it. There's no short cut. There's no way in which you're going to end the discussion, because new generations arise; every group has the same crazy ideas. I get a great many letters from people who think that the way to solve budget problems and fiscal problems is to simply print money and pay off the debt. And there's almost no way of making those people realize just what a bunch of nonsense that is.

edit: before people more familiar with economics than i take me down a notch... yes, you're right, i am oversimplifying the matter and emphasizing the predominance of neoliberalism/neoclassicism/supply-side-ism to the exclusion of others. my bad. but then again, "others" are prolly used to being excluded by now. :P

[Biggles]

Demand side economics still has a role to play - even in the US. :)

When asked about the damage to the Florida economy caused by the hurricanes an economist replied it won't be that bad. The increased demand for building supplies and the labour required to carry out the work will stimulate the economy of Florida and consequently it shouldn't hurt the market too much or damage Bush's chances in the State.

This is classic Keynesian economics. Friedman's model was used by Mrs Thatcher - we ended up with a massive deficit, high unemployment and interest rates in double figures. The rich, however, got considerably richer. The 1980s saw a marked rise in Porsches on the road (doing nothing for the deficit)

Lowering taxes per se is not always a good idea. One has to look at the burden of taxation as a whole and balance this against spending plans. The Bush administration is spending a lot on the military - increasing spending in real terms considerably. Likewise homeland security and Iraq reconstruction will cost tax dollars (a lot of tax dollars).

If running a country was simply a case of cutting taxes the job would have been cracked years ago. I suspect the good professor's comments are somewhat out of context and he his espousing an aspirational economic direction rather than addressing current economic realities facing George Bush.

The leeway for more tax cuts will be limited and anyway could also have the negative result of increasing the deficit of finished goods coming into the country. Tax is a form of fiscal control just as interest rates are - it simply requires the administration of the day to show prudence in how it is spent (or not spent). :shifty:

[Rat Faced]

Demand side economics still has a role to play - even in the US. :)

When asked about the damage to the Florida economy caused by the hurricanes an economist replied it won't be that bad. The increased demand for building supplies and the labour required to carry out the work will stimulate the economy of Florida and consequently it shouldn't hurt the market too much or damage Bush's chances in the State.

This is classic Keynesian economics. Freidman's model was used by Mrs Thatcher - we ended up with a massive deficit, high unemployment and interest rates in double figures. The rich, however, got considerably richer. The 1980s saw a marked rise in Porsches on the road (doing nothing for the deficit)

Lowering taxes per se is not always a good idea. One has to look at the burden of taxation as a whole and balance this against spending plans. The Bush administration is spending a lot on the military - increasing spending in real terms considerably. Likewise homeland security and Iraq reconstruction will cost tax dollars (a lot of tax dollars).

If running a country was simply a case of cutting taxes the job would have been cracked years ago. I suspect the good professor's comments are somewhat out of context and he his espousing an aspirational economic direction rather than addressing current economic realities facing George Bush.

The leeway for more tax cuts will be limited and anyway could also have the negative result of increasing the deficit of finished goods coming into the country. Tax is a form of fiscal control just as interest rates are - it simply requires the administration of the day to show prudence in how it is spent (or not spent). :shifty:

What he said....

You sure you dont work for the IR? :blink:

[vidcc]

One must take into account American ideals.
Tax is evil..period..it doesn't matter that the private sector charges umpteen times as much to provide a service the state does..tax is evil.

[Rat Faced]

Mr. Prescott is a economics professor here at ASU who just won the
nobel prize in economics, the first nobel for the university...smart sounding guy; I just heard him on the radio yesterday.


Nobel laureate calls for steeper tax cuts in US

Mon Oct 11, 5:21 PM ET Politics - AFP


WASHINGTON (AFP) - Edward Prescott, who picked up the Nobel Prize for Economics, said President George W. Bush (news - web sites)'s tax rate cuts were "pretty small" and should have been bigger.


AFP/Royal Swedish Academy of Science-HO/File Photo



"What Bush has done has been not very big, it's pretty small," Prescott told CNBC financial news television.


"Tax rates were not cut enough," he said.


Lower tax rates provided an incentive to work, Prescott said.


Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.


The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve (news - web sites) Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.


But "in the early '90s the economy was depressed by the tax increase in '93 by about four percent, and it's right at that level now," Prescott said.


Bush, who is fighting to get re-elected November 2, has cut taxes by about 1.7 trillion dollars during his term.


The US leader accuses his Democratic rival John Kerry (news - web sites) of favoring tax increases, despite Kerry's promise to cut taxes for everyone earning less than 200,000 dollars a year.


So... 1 verses 150 Economic Professors, From Harvard, Stanford etc...


Open Letter to President George W. Bush (REPRINT)
More than 150 tenured and emeritus professors from Harvard, Stanford and other leading business schools, and other leading universities told President Bush to roll back his administration’s massive tax cuts and stem the growth of the federal budget deficit in a harshly worded letter.
Joe Sparks [Global Imaging] | POSTED: 10.12.04 @14:10

Open Letter to President George W. Bush
http://www.openlettertothepresident.org


October 4, 2004

Dear Mr. President:

As professors of economics and business, we are concerned that U.S. economic policy has taken a dangerous turn under your stewardship. Nearly every major economic indicator has deteriorated since you took office in January 2001. Real GDP growth during your term is the lowest of any presidential term in recent memory. Total non-farm employment has contracted and the unemployment rate has increased. Bankruptcies are up sharply, as is our dependence on foreign capital to finance an exploding current account deficit. All three major stock indexes are lower now than at the time of your inauguration. The percentage of Americans in poverty has increased, real median income has declined, and income inequality has grown.

The data make clear that your policy of slashing taxes – primarily for those at the upper reaches of the income distribution – has not worked. The fiscal reversal that has taken place under your leadership is so extreme that it would have been unimaginable just a few years ago. The federal budget surplus of over $200 billion that we enjoyed in the year 2000 has disappeared, and we are now facing a massive annual deficit of over $400 billion. In fact, if transfers from the Social Security trust fund are excluded, the federal deficit is even worse – well in excess of a half a trillion dollars this year alone. Although some members of your administration have suggested that the mountain of new debt accumulated on your watch is mainly the consequence of 9-11 and the war on terror, budget experts know that this is simply false. Your economic policies have played a significant role in driving this fiscal collapse. And the economic proposals you have suggested for a potential second term – from diverting Social Security contributions into private accounts to making the recent tax cuts permanent – only promise to exacerbate the crisis by further narrowing the federal revenue base.

These sorts of deficits crowd out private investment and are politically addictive. They also place a heavy burden on monetary policy – and create additional pressure for higher interest rates – by stoking inflationary expectations. If your economic advisers are telling you that these deficits can be defeated through further reductions in tax rates, then you need new advisers. More robust economic growth could certainly help, but nearly every one of your administration’s economic forecasts – both before and after 9-11 – has proved overly optimistic. Expenditure cuts could be part of the answer, but your record so far has been one of increasing expenditures, not reducing them.

What is called for, we believe, is a dramatic reorientation of fiscal policy, including substantial reversals of your tax policy. Running a budget deficit in response to a short bout of recession is one thing. But running large structural deficits over a long period is something else entirely. We therefore urge you to consider the fiscal realities we now face and the substantial burden they are placing on our economy.

We also urge you to consider the distributional consequences of your policies. Under your administration, the income gap between the most affluent Americans and everyone else has widened. Although the latest data reveal that real household incomes have dropped across the board since you took office, low and middle income households have experienced steeper declines than upper income households. To be sure, the general phenomenon of mounting inequality preceded your administration, but it has continued (and, by some accounts, intensified) over the past three and a half years.

Some degree of inequality is inherent in any free market economy, creating positive incentives for economic and technological advancement. But when inequality becomes extreme, it can be socially corrosive and economically dysfunctional. Problems of this sort are visible throughout much of the developing world. At the moment, the most commonly accepted measure of inequality – the so-called Gini coefficient – is far higher in the United States than in any other developed country and is continuing to move upward. We don’t know where the breakpoint is for the U.S., but we would rather not find out. With all due respect, we believe your tax policy has exacerbated the problem of inequality in the United States, which has worrisome implications for the economy as a whole. We very much hope you will take this threat to our nation into account as you consider new fiscal approaches to address the nation’s most pressing economic problems.

Sensible and farsighted economic management requires true discipline, compassion, and courage – not just slogans. Given the tenuous state of the American economy, we believe that the time for an honest assessment of the problem and for genuine corrective action is now. Ignoring the fiscal crisis that has taken hold during your presidency may seem politically appealing in the short run, but we fear it could ultimately prove disastrous. From a policy standpoint, the clear message is that more of the same won’t work. The warning signs are already visible, and it is incumbent upon all of us to pay attention.

Respectfully submitted,





Source (with link to original letter there) (http://www.alwayson-network.com/comments.php?id=6404_0_5_0_C)

[vidcc]

But Rat you forget the golden rule of expert findings....only the ones that make your case count....:shifty:

I would say this is a 2 way street

[j2k4]

I read the guy, and like what he says, but hey-even Jimmy Carter has a Nobel Prize, and he's a total idiot, so...

I seem to be on a Jimmy Carter roll this evening.

[Rat Faced]

but hey-even Jimmy Carter has a Nobel Prize, and he's a total idiot, so...



Aha, does this mean you support the 150 Economic Professors that say Bush's economic Policy is crap, over the 1 that says its good?

We'll make a Democrat out of you yet J2K4...

Or were you tired here, like i was the other day?


:lol: :lol: :lol:

[j2k4]

Aha, does this mean you support the 150 Economic Professors that say Bush's economic Policy is crap, over the 1 that says its good?

We'll make a Democrat out of you yet J2K4...

Or were you tired here, like i was the other day?


:lol: :lol: :lol:

No, that was Busyman; I can do this stuff in my sleep, like I have been all along. ;)

You may call me anything you like, even a Democrat, but never a liberal, and any exertions to that end are wasted.

Of course, you are welcome to lobby your Government or the U.N. to fund your efforts; they have a penchant for waste.