Warren Buffet on Bush Tax Cuts and "Trickle Down"Follow

Done. You sir are a moran.

The two links I provided show in the years where the Taxes on the wealthiest bracket were high the unemployment rate dropped. In the years where they were low the unemployment rate climbed. The only correlation that matters is the tax rates, and unemployment rates at the start and ends of the terms.

Not once during clintons term were the wealthiest americans taxed less. The highest bracket remained @ 39.6%. If you can not compare chart A and information from source B you are retarded.

What was the magical influence that Clinton had during the 93-01 years when he took a 4.7% GDP deficit, and Turned it into a 2.4% Surplus. He took 7.7% unemployment and turned it to 4.2%, he took the rich and taxed them harder than any other income earners. Inflation rate dropped to 2.1% DOW rose from 3255 > 11500.

Everything he did in his economics was good, and it all started with taxing the rich. Or do you have a better explanation. Other than than typical No not possible rhetoric. Maybe God did.

Whoa, whoa, whoa... no. Consumerism is the driving force of capitalism. This point is entirely relevant to the current situation. You can't address it without addressing consumerism.

And your conclusions are FUBAR.

And both the supply and demand side arguments being debated here are within the context of an assumed capitalist economic system. Do you see how making an anti-consumerism argument is irrelevant?

Since this was actually an intelligent post, let me shift to this instead:



Sure, but it shrinks the actual profits from that increased demand by the same amount. This means that the choice to spend those profits simply putting more of the same good on the shelves begins to outweigh the choice to spend those profits making a new and better product.



It absolutely does.



No, it doesn't. You keep repeating the assumptions of the demand side argument as though they are facts, but you don't explain *why* those assumptions are true. Let me explain to you why those assumptions are *not* true:

Profit is revenue retained in excess of production costs (net revenue instead of gross revenue). Taxes are levied on profits, not that gross revenue. What this means is that the cost to put an existing item on the shelf is not taxed. But since the money to research and develop a new item comes after taxes, so it is taxed. Thus anything which raises taxes (or in any way reduces the profit ratio of a business, but taxes are a biggie here) will tend to negatively impact new product development.

They are not equal. When you tax profits on the idea that you can push that back into the demand side and it'll come right back, you are absolutely skewing business away from developing new things and into just churning out the same things over and over. It's not even a complicated explanation. It's very simple math.



Yes. But bad policy is generally anything that the government does to try to force an outcome it wants. That's the biggest stifler of innovation of all. And most of the time, it's lead by an overly aggressive form of demand side policy.



No. I don't want my government to have a more agile economic policy. I want it to have an economic policy that leaves the economy alone except for the most broad aspects. I want it to set tax rates and then leave them alone. I want them to not try to manually manipulate the market every day. When the government does that, it eliminates consistency and predictability. The free market players can't know what the government is going to do next and so they become more cautious.


What has been going on for the last two years is largely because of a government economic policy that is too active and is attempting to hand hold the economy. It's been a disaster. Set some basic rules and then get the hell out of the way. That's how government can best manage an economy.

EDIT: And for the record, and just in case you didn't know this: I don't want to transition into a "planed economic style". I think that's the worst thing we could do. I think it's a violation of the principles of liberty that I hold dear and I will argue against and fight against such a thing until the day I die. I'm not sure why you'd think that I would want something which would help us move to something I don't want. That's not really a good argument at all.

Edited, Dec 21st 2010 6:17pm by gbaji

If the only argument you had was the correlative one he's making? Sure. It's clear that other factors have vastly more to do with the year to year unemployment rate than tax rates. Which is why I asked if he had a reasonable explanation as to why raising taxes would lower unemployment. That would be a good starting point at least, right?

See my earlier breaking example. Pushing on the breaks slows down a car, but if all you correlate is that you have the break pressed and the car is moving forward you could incorrectly argue that breaking causes the car to more forward when in fact other factors cause it to move forward and the break actually slows it down.



Call it what you want. I'm just trying to get idiot-boy to accept that the correlation argument he's making is ridiculous. We haven't even gotten to an examination of other factors because he keeps zeroing in on the dumbest argument possible and just wont let it go.

So how exactly do tax cuts effect jobs then? If Clinton having lowered unemployment during his 8 years while bush ended with an overall increase in unemployment are not related to taxes, then why does it matter if the wealthiest americans are taxed or not. Basically by "defeating" my points you have "defeated" your entire argument as well.

If taxes or tax cuts do not not correlate into Jobs, thus lowering the unemployment. Why are you against them.


Keep in mind not only did clinton leave office with 4 consecutive years of budget surpluses, he also spent money on many medicare, and social programs. Where as Bush left with a huge budget deficit and not once over his 8 years post a budget surplus.


So tax cuts on the wealthy are good for the economy how?

(also I am still waiting for you to show me some numbers of where Tax Cuts lowered the unemployment levels or did anything good fo the overall well being of the economy. Keep in mind I am talking relative to prior years. EX. BUSHSR > Clinton, Clinton>BushJR in another 6 years we can discuss Bush > Obama if you want.)

Edited, Dec 21st 2010 9:55pm by rdmcandie

I did hit on this a couple times.

If the government has additional Tax Revenue from another source it means it can

A. Fund More programs
B. Fund Additional Programs
C. Lower Taxes in a different Area.

Lets look at C.

By getting increased taxes from say The income earners in the USA (the highest bracket earners) this allows the Government to provide tax relief benefits, or straight up tax cuts on businesses. This means a company would keep more of its money every year. Money that can be directly put back into the company to increase.

A. Production
B. Employment
C. Employmee Services (IE. Health Care, Bonuses etc)

All three of those things result in a boost to the economy. Overall Production means a stronger bottom line next yar which means even more savings thanks to taxes being lowered. Employment means more employees maybe another shift that supports production. Employment Services takes the monetary burden from eployees with health care coverage, and provides them with incentive to keep working. Putting more money in their hands to purchase things.

Now the owners of said company could also pocket the money, and depending on the size of their business they could become affected by the increase in taxes for the wealthy, which that money that was saved becomes taxable and the Government then takes it to cover the money lost in the lower business taxes.

In the end the tax cuts being removed from the Wealthy are put into a quasi investment in business. The difference is, this investment is ongoing, it is guaranteed to occur. Unlike Investment from private persons. This is not Government investment this is the government leaving money where it should be, in the employers hands. It means that employers across the nation are able to take the saved money and invest it into their companies.

The safeguard is in the removal of tax cuts that allows the government to get the money if it is not used as a business investment.

This is how Bush managed to within 8 years turn a budget surplus, a 4.2% unemployment rate, a great economy, into a huge budget deficit, a 7/7% unemployment rate and a terrible economy.

You can not rely on private investments, which means you can not rely on tax cuts to the wealthy. Where Bus really shot himself is when he also cut business taxes as well. You can not cut taxes and spend. It is fiscally impossible. Let alone when you are running 2 wars.

No. Irrelevant is exactly the correct word.



Consumerism is just as necessary for the Demand Side Keynesian argument as it is for the Supply side argument (arguably more so, in fact). I already said this. So in a debate between trickle down economic ideas and tax and shift to demand side, jumping on the "but consumerism is bad!" argument is just pointless.

Please tell me you meant for A to be "Fund programs more". But in any case, this is not an argument for raising taxes without an accompanying argument for why said programs are a sufficiently better use of the money than leaving it in the hands of those who earned it to justify taking it from them in the first place. And you have not made that argument.



Now you're just repeating rhetoric. I love how everyone talks about helping "small businesses". It's like a mantra. It's the latest talking point. It's also complete BS. Those small businesses are overwhelmingly owned by the very people who would have had their taxes raised if Obama had had his way. So let's stop pretending that this is about shifting money from "the rich" to "businesses".



Um... the best way to ensure that a privately owned company (or an S-corp) can keep more of its money is to *not* raise taxes on everyone making more than $250k/year. If you think this is important, you should be completely opposed to the tax plan Obama wanted to do.



Now you're arguing my point. The overwhelming majority of people are employed by other people who earn more than $250k/year. If you agree that lowering taxes on those business owners will result in all of those benefits, then why are you arguing that they should have their taxes raised?

You're making exactly the "trickle down" argument you started out saying didn't work. Am I in a Bugs Bunny cartoon now? Did you expect me to start arguing that tax cuts on business owners *doesn't* result in good things for those who work for them?



How can you write this with a straight face? That's like saying that being mauled by a bear is an investment in your health. It's like I'm having an argument with someone who can't follow their own position from one sentence to the next. Someone help me! :)



Huh? How can it not be investment from private persons *and* not be government investment? If it's left in the hands of the people, it's not taxed. Now you're back to making my argument for me.

Do you even know what your position is? Cause I'm thinking you've got a split personality or something. Either that, or you simply don't know or understand what words like "private", "public", "government", and "investment" actually mean and so you just use them randomly where it seems like they fit in a sentence.



Huh? Wait! Are you arguing that the government should tax the wealthy, but then subsidize businesses that they want to succeed? Because that's a whole different argument, and for a whole different set of reasons, none of which you've remotely touched on yet.



Except that private investment is by far the largest cause of improvements to general standard of living. Everything you own was created by private investment. The clothes you are wearing, the house you are sitting in, the computer you are typing on, the clock on the wall, the phone you use, everything. Without private investment in commercialization of new technology, you'd be living in a hand made home out of wood and mud, with hand sews clothes, and we'd be corresponding by paper mail, and writing by candle light.

That's what you lose when you tax the rich. All of those improvements occur more slowly or not at all if private individuals do not have sufficient wealth to invest in those new things. Yes, it is an unsure process. But that's the point. We can't predict what the next big thing will be, or how it will work, or how it will change our lives. And that's exactly the reason why the undirected and unplanned flailing about that the private market does will result in those things happening, while the planned economic solutions will not.

No one, not even science fiction writers predicted the home computer until after it happened. Imagine what would have happened if we'd taxed all the wealth from Wozniak and Job's parents so that those two rich kids could not have cobbled together the Apple computer in their garage? Or Bill Gates? Or any of the people who invested their money in the products they came up with?

Your argument rests on the assumption that the government can figure out what needs to be made and can best make it. But history shows us that no one, and especially not the government is able to consistently make such a prediction. We need to allow that random process of the free market to roam free, knowing it'll make mistakes, but also knowing that it'll hit on successes that all the planning in the world will never come up with. The world is constantly improved by free market actions, even while on paper appearing wasteful.


And you wont ever see that on an accounting balance sheet, which is why the demand side argument is flawed. It attempts to apply a policy which assumes we can do that. But we can't. We never have. And if we eliminate that free market, we hurt us in ways we cannot predict. Because we can't know what might have been invented if we'd let some rich kid tinker around, and let some other rich people invest in his idea. That's something no amount of planning can replace. And that's why I'm right and you're wrong.




And yet, the debt to gdp ratio during that entire time period stayed stable at around 35-37%. We were not "in debt" during Bush's term, nor did we sink more into debt. That's a statistical lie used to influence people who are ignorant of the facts (or who just look at the wrong indicators). Deficit isn't that important. It's the debt ratio that is. Bush's economic policies were completely sustainable, despite massive insistence to the contrary.

Hah! Simple is good, I suppose...

And can we agree that the demand side policies being pushed in this thread amplify the worst aspects of consumerism? Transferring money from the supply side to the demand side, on the assumption that it wont cost you anything because the increased supply will be spent on more stuff produced by the supply side is pretty much a recipe for producers to make as much disposable crap as possible in order to cash in on the "make it up in volume" dynamic that has been created.

I'm not sure what kind of economic system you think would provide for modern needs that doesn't utilize some form of consumerism, but if that's your big issue, it's odd that you target the trickle down aspect of this argument. But I never discount the impact indoctrination has on people, so there is that.



On balance? Strange coming from someone posting on a computer on an internet forum.


Reminds me of one of those documentary shows (bravo, amc, or some other channel, don't remember), in which they were talking about the Hollywood films industry. One of the segments was about Sony getting into the film industry. The film producers were explaining to the Sony execs how the industry worked. They said that each year you might make 10 films. 1 or 2 of them would be blockbusters and would make tons of money, 3-5 of them would do ok, and make a little bit of money, and the rest would flop and lose money or at best break even. The Sony execs talked among themselves for awhile after this and then asked a question: "Why don't we just make the blockbusters"?


When people talk about alternative government controlled/planned economic theories, they are showing the same flawed thinking. If you could just make the blockbusters, you would. But you don't know ahead of times which ones will be big hits and which wont. If all we do is point to all the horrible flops and work to stop making them, we lose sight of the fact that in the process of making those flops, we made some really good films as well. You can't separate them. Same with economic policies. The argument in favor of government directed economic activity is based on eliminating what is seen as wasteful greed, investments put into things that never pan out, and occasional market crashes. But if we eliminate those things by putting the government in charge, we also eliminate the blockbusters. We don't end out with the car, or the television, or the telephone, or the computer. At least not as products that the general population can obtain and use for themselves.


That's the cost. And as I've pointed out before, it's hard to see. So yeah, in the pursuit of profits on one side, and the pursuit of better "stuff" on the other, we do cause problems. We load junk into landfills, we consume natural resources, we make choices which may hurt us sometimes, and we amplify the difference between the haves and have nots. But along the way we constantly improve the general quality of life for everyone. Can anyone deny that people's lives as a whole are on balance better today than they were a century ago? We live longer, we have greater mobility, greater education, and access to tools and capabilities literally undreamed of then.


Market crashes come and go. But the advances we make stay with us. That's why it's the right way to do things.

Edited, Dec 22nd 2010 2:28pm by gbaji

Not quite. Since you can raise taxation on accumulated nonproductive wealth, you can increase the available funding for investment in tech development. You also aren't taxing R&D, by virtue of the fact that it's still in development and thus not producing taxable profits. As I said before, you also benefit from having higher demand for new products, meaning that once those new technologies reach the market, it is easier for them to become profitable. Those profits /are/ taxed at a higher rate, but I see that as fair, since they have been given the additional structural support and are profitable.

As a rule, it lowers the risk of already risky ventures, while lowering the reward of fundamentally safe ones. This alleviates on of the main reasons a company would pull back from this type of investment.

There is also something to be said for having US companies that export more tech products as a way to alleviate the trade deficit.

so only 5% of the US population own a car? And only 5% have heating and/or air conditioning in their homes? And only 5% own a television? Only 5% own a home computer? Only 5% have internet access? Only 5% own a microwave oven? Only 5% own clothing or furniture that is more flame resistant than those from 50 years ago?


Do you just randomly spout stuff and hope no one notices how far off it is?