Assorted links

by on December 28, 2012 at 11:38 am in Uncategorized | Permalink

1 AndrewL December 28, 2012 at 12:33 pm

#3 – Figure 1 shows that a majority of the tax cut occurred in 2003, Figure 3 shows that federal tax receipts as percent of GDP rose from 16% to a little over 18% while federal outlays remained constant around 20% from 2003 – late 2007. Then the housing bubble collapse. The paper does not mention the housing bubble collapse and the related bailouts.

2 Michael December 28, 2012 at 1:40 pm

Hear hear. I think every Republican in Congress would happily sign on to Obama’s tax hike on the “wealthy” if it were actually tied to some real cuts. Not phantom Obamacare-esque, SGR style cuts, but actual cuts.

The biggest problem R’s are having is continuing to buy into the Dem line that this has anything to do with tax rates.

3 Tom West December 28, 2012 at 1:30 pm

#3: Just to make it clear, the article takes it as a given that tax-cuts increase growth, thus by definition, if the tax cuts didn’t increase growth, they were done wrong.

4 Sam December 28, 2012 at 7:36 pm

Where in the paper does he argue ‘by definition’? Among the points made are that the tax cuts were too slowly phased in which disincentivises present consumption, and second that tax cuts without spending cuts are really a tax deferral and therefore don’t increase a household’s permanent income.

5 Willitts December 28, 2012 at 2:01 pm

4. Maybe Berkeley should try using a majestic symbol from mythology, for example, a phoenix.

Oh, sorry, that one is taken.

6 Orange14 December 28, 2012 at 2:28 pm

#3 – yet another non-peer reviewed paper from Mercatus. I started to read it and early on started reading the old canard that tax cuts increase growth. Ho, ho, Merry Christmas – ooops, that holiday is past.

7 prior_approval December 29, 2012 at 10:02 am

And let us see if the link can be posted in the comments –

And the answer is no (at least after checking if the comment posted).

Strangely, the general director of the Mercatus Center will proudly link to work from Mercatus (which makes sense, of course – the general director does not have to be humble about the center’s work), but it is still impossible for anyone in the comments to post a Mercatus Center link.

An apparently puzzling inconsistency, though definitely well within the privileges accorded to the blog’s owners.

8 Orange14 December 28, 2012 at 2:30 pm

#4 – I believe that this was the new logo for the UC system as a whole and not just the Berkeley campus.

9 Joe Smith December 28, 2012 at 2:44 pm

Nothing went wrong with the Bush tax cuts – they were intended to bankrupt America as a way of squeezing social spending for ideological reasons (“starve the beast”) and are working out according to plan.

10 Brandon Berg December 28, 2012 at 10:49 pm

Except it hasn’t worked. The beast continues to grow ever fatter.

11 libert December 29, 2012 at 12:20 am

Yes!! Finally someone admits that starve the beast doesn’t work.

Maybe we should try the reverse…

12 Steve December 29, 2012 at 3:35 am

How about just up and sending the beast to the slaughterhouse rather than trying to persuade it dead by whatever means.

13 Irma Vep December 28, 2012 at 3:33 pm

#4 – UC should just appropriate some of the Berkeley iconography – either the “Cal” logo, or the golden bear. Refocus your brand on one of your most popular product lines – sounds like something a smart CEO would do right? Berkeley’s current iconography reference the state of California and not a particular school on the East Bay; this is a source of active confusion. Also that bear hardly gets used anymore.

14 Brian Donohue December 28, 2012 at 3:59 pm

The Bush tax cuts, along with the post-9/11 “cost is no object” mentality on the spending side and the pumping up of the real estate bubble, turned what would have been a reasonably sharp recession into a mild recession, in effect kicking the can down the road and setting the stage for the Great Recession.

I think it’s worth Republicans’ time to meditate on the late 1980s/ early 1990s experience. Top marginal rates went from 28% to 39.6% just as the country was emerging from recession, and we were assured this would drive the country back into recession.

And lo and behold, welfare reform was passed and we saw the first and so far only balanced budgets of my lifetime.

Contrary to Joe Smith’s muddled interpretation, ‘starve the beast’ has been a catastrophe, since it means ‘free government’ to a large slice of the citizenry, and when something is ‘free’…wait a minute, where’s my econ textbook?

15 Andrew' December 28, 2012 at 5:41 pm

I’m not sure not starving the beast would mean that the cost of government were not free to others. I know there are some papers on it, but do they go beyond an empirical observation?

Applied to a household, if the breadwinner refuses to bring in more revenue but the family keeps spending then eventually the creditors pull out. Families may go bankrupt in a blaze of glory, but is our government really more irrational than your average deadbeat?

16 Brian Donohue December 28, 2012 at 6:31 pm

Dammit that first sentence has me all tied up in ‘nots’. Either I agree 100% or you couldn’t be more wrong.

Not sure a household analogy works for me. More like a boarding house, where the well-to-do guy, along with copious borrowing, covers the bills for a while. Then the boardinghouse agrees to lavish new healthcare benefits for all, but still it’s mostly the big shot and borrowing coughing up. One day, the rest of the boarders start getting billed for the great new benefit, and they’re like “oh, this kinda sucks.”

Not that I think Obamacare is gonna be repealed, but who knows? Anyway, I’m all for an honest rendering of costs and benefits.

Yes, it’s anecdotal, but one of the funniest moments I recall in political history turned on the passage of “Medicare Part C- catastrophic coverage”, hailed as a victory for seniors in the late ’80s. Then the old farts learned that THEY were gonna have to pay for it. I recall some public incident where Dan Rostenkowski was attacked by a mob of old biddies. Then, the law was repealed. Good times.

17 Brian Donohue December 28, 2012 at 6:47 pm

And I’m not making that up:

“One of the most searing images for a risk-averse Congressman desirous of re-election was the spectacle of Dan Rostenkowski, House Ways and Means Chairman and one of the most powerful men in Congress, fleeing a crowd of irate senior citizens protesting the Catastrophic Coverage Act. One senior citizen even jumped on the hood of Congressman Rostenkowski’s car—a visual image beyond even our wildest expectations. The fact that Congressman Rostenkowski lost his bid for reelection shortly after this incident reinforced the risks of “messing with Medicare” for even the dullest members of Congress. The principal sin of the Catastrophic Coverage Act (and I use the term ironically because the bill was actually exceedingly virtuous and we benefited greatly from its repeal) was that it imposed the costs of expanded coverage on the population that would benefit from the expansion. Predictably enough, gluttony turns out to be less appealing if one must foot the bill.”

18 Willitts December 28, 2012 at 7:00 pm

Rostenkowski lost his election because he pleaded guilty to mail fraud and was sentenced to prison.

The federal government could have an entire wing of a prison dedicated to Illinois politicians without any vacancies.

19 Dismalist December 28, 2012 at 8:31 pm

Dan Rostenkowski did most for tax reform, even though he wasn’t a reformer. Pity he was a criminal.

Wilbur Mills did most for free trade, even though he wasn’t a free trader. Pity about the bottl’a whisky per day, and the [live] woman in the Tidal Basin.

Gotta love those guys!

20 Andre December 28, 2012 at 6:37 pm

Household can’t print it’s own money and the bread winners spending isn’t the rest of the household’s income. And I don’t think the case can be made that people at the bottom of the income bracket were the one’s beating down the doors of government begging for Bush’s tax cuts so they could get their government services for free. Do people really expect the Republican’s to actually cut spending? Were the Bush years not enough to prove that they don’t care about spending?

21 Brian December 28, 2012 at 4:36 pm

#1: “United 173, Mayday! We’re… the engines are flaming out – we’re going down!”

Interesting, I was just thinking about this childhood memory earlier today as it was 34 years ago tonight that this happened less than two miles from where I lived as a child. I remember the power going out briefly and then going to look at the wreckage the next morning. Amazing luck that the two houses it destroyed were empty at the time it crashed (and both of the houses were adjacent to apartment complexes).

22 Cliff December 28, 2012 at 4:49 pm

My favorite is “f*ckkkkkk!”

23 Brian Donohue December 28, 2012 at 5:12 pm

“Amy, I love you.”

Pretty badass. Damn- I’ll never be as cool as that guy.

24 Willitts December 28, 2012 at 7:03 pm

Oh my God. Oh my God.

I was surprised to see that coming from a pilot on China Airlines and, as I suspected, the airline is based in Taiwan.

The PRC probably would have censored those last words.

25 Foobarista December 28, 2012 at 8:54 pm

If this is a translation of “Wo de Tian!” (as it often is), this expression is used all over the Chinese world, including PRC.

26 Rahul December 28, 2012 at 10:58 pm

Wonder what Russians shouted in those days….

27 anonymous... December 29, 2012 at 8:57 pm

If the burgeoning genre of Russian dashcam car crash videos on YouTube is any indication, it probably involves maternal incest.

28 careless January 3, 2013 at 1:34 pm

China airlines pilots are mostly white guys, or were when I was flying it a lot 7-12 years ago

29 Saturos December 29, 2012 at 4:11 am

Shouldn’t really be laughing, but my favourite one has got to be Vnokovo Airlines, “Mountains!!!”. (Although I am also partial to Vladivostokavia’s response. Also Brit Air.)

30 anonymous... December 29, 2012 at 8:50 pm

It’s Vnukovo, rather than “Vnokovo”, and Wikipedia says flight 2801 rather than 2601. That’s a bit sloppy at the linked site.

31 ThoamasH December 28, 2012 at 7:23 pm

The Bush tax cuts were Keynesian only in the “conservative” fantasy of Keynesism. There is no macroeconomic demand management reason to increase the deficit — either through tax cuts or spending increases (Bush did both) when the economy is near full employment and nominal interest rates are well above zero. The Keynesian recommendation for deficits is during severe recessions and interest rates are near zero. [Whether that is a correct recommendation is debatable, but THAT is Keynes.] Even if one thought the mild 2001 recession merited a larger deficit achieved through tax cuts, a “Keynesian” tax cut would have been much more temporary say a payroll or corporate tax holiday until employment returned to a higher level. Nor can the 2001-03 tax cuts be defended as reducing deadweight losses, because they were focused on personal tax rates rather than corporate taxes where large intersectional distortions exist and were not offset with other less distortionary tax increases or reductions in low value expenditures to prevent creating deficits in the long run. The paper’s conclusion, “The episode offers a cautionary lesson in how not to cut taxes,” however, stands.

32 libert December 29, 2012 at 12:36 am

#3. Yes, a 10-year, multi-trillion dollar tax cut is too “temporary” and insufficient. This makes sense given Meractus’s well-known view that the $0.8 trillion stimulus package was too small and too temporary.

It is refreshing also for Mercatus to come out and admit that the Bush tax cuts “offers a cautionary lesson in how not to cut taxes.” I guess it’s not surprising then that they are the chief lobbying force pushing Obama to repeal those horrible tax cuts.

33 boba December 29, 2012 at 8:42 am

Re #1: I used to joke with my climbing partner that I didn’t know what my first words were but I’ll bet my last words are: “Oh sh!t” (Blurted out as a handhold or foothold slips and we plunge down the chasm. His retort was, “well if I’m belayed to you, I’ll bet I say ‘You idiot.'”

34 John December 29, 2012 at 8:51 pm

Re # 4 — D+ is almost as good as SOL for primary education standards.

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