Historically Neoconservatism will destroy the US military.

[Theben]

And during booms the tax levels should be raised. I agree.

[Ned]

Here is an interesting site that shows that the Kennedy tax cut was the greatest since WWII by far, larger as a percentage of the budget than all three Bush tax cuts combined! He did that even while running a deficit and the Vietnam War was heating up. Was Kennedy out of his mind?

And yet, in the period after his cuts, Federal Tax revenue increased! How? Why? Smoke and mirrors?

Or, is this the Laffer curve in action?

http://www.taxfoundation.org/ff/taxcutperspective.html

[Kidlicious]

Originally posted by Ned
And yet, in the period after his cuts, Federal Tax revenue increased! How? Why? Smoke and mirrors?

Or, is this the Laffer curve in action?

No, they were demand side cuts.

[Mr. Harley]

I should have known better. Especially here, you cannot discuss the potential downside to the US military reference the economy and solvency of the US government without accepting the premise (i.e. economic problems). That's never going to happen on Apolyton. I was hoping my proviso would head off that argument, because of course supply-side economic types will deny the premise, as in everything will work out (please note, that's dogma, again they have no science if they cannot calculate that tax-point "sweet spot"). Therefore since they deny the premise, they'll argue that and thus we never get to the main point - will this destroy the US military. I knew even if I didn't mention it the supply-siders would argue that this won't happen, but I could hope. Coincidentally, I'm a fiscal radical - I believe in balanced budgets, using realistic accounting rules. I hate both parties, look at my evil wish on the revived thread concerning our political leadership.

Thank you Ted for attempting to introduce some genuine economics to this, the problem is that the Laffer curve does not apply to the policitical manifestation of supply-side economics, as applied by the Reagan and now the Bush administration.

http://216.239.37.104/search?q=cache:RZhsinz0k1MJ:https://www.independent.org/tii/medi...hl=en&ie=UTF-8

President Reagan’s economic program was contained in a document called A Program for Economic Recovery, published on February 18, 1981. Contrary to many uninformed academic economists’ assertions, the administration did not base its pro-gram on a “Laffer curve” forecast that the tax cut would pay for itself. The administration decided not to fight the battle for a dynamic revenue forecast and used thestandard static revenue forecasting still in use today. Tables in the document show that the administration assumed that every dollar of tax cut would result in a dollar of lost revenue.

Lets not even discuss the current spate of fiscal irresponsibility, that has many prominent economists concerned, plus many foreign investors. Anybody watch whats happening to the exchange rate betweent he euro and the dollar?

Shogun Gunner, thanks for an attempt to bring impartiality to the thread and Kidicious for trying to point out the flaw of one economic theorty fits all. Shogun, don't so quick to discount the deficit, and interest rates. With the dollar falling, the international economy considering starting the transfer over to Euros, and the strong possibility of inverstor flight from US bonds and possibly stocks, we could get nailed viciously on an inflaction/interest rate/housing market crisis loop. Buy the way, I've been watching our deficit since the 1980's, and it scared my then, its scares my s***less now. Couple that to unemployment, and downward pressure on US salaries...

Boris, at least you tried argueing with facts unlike most of your name-calling opposites, which I appreciate. Ogie and Mr. Fun trash both parties, appropriately from my viewpoint (remember, I',m a balanced budget type). DanS, nice graphs, but you need the deficits factored in to stay on topic. Or are they just a little bit embarressing? That's also a succinct analysis of Neocon domestic policies (or their lack thereof - but they do have dogma - CUT TAXES), I just wouldn't have put it quite so bluntly.

Theban, thanks very much for at least trying to stay on point, about surpluses and responding to emergencies, reference deterioration of the US military under the current policies. CerberusIV, also thanks for staying on topic, except that how can a bankrupt government afford the nice, juicy contracts. Whoha looks at the that exact dilemma.

After this thread dies, I'll try to restart and rephrase the premise. Naah. The whole question is based on economics, and it will just be like a Necrophiliac who into bestiality and S&M simultaneously - It's like beating a dead horse.

[Ned]

Shawn, did you look at that link I posted. One of the most interesting things about it is that it shows the gradual reduction of military spending from Kennedy's 42% to today's 17 percent of the budget, and yet the budget has stayed near the 20% of the GNP this entire time.

Also, now our economy is so large that 17% produces military spending about equal to the rest of the world combined. It seem that so long as the economy is healthy and so long as overall spending does not rise, we can continue to maintain the world's finest military.

It would be interesting if DanS could overlay the effective dates of the tax cuts on his chart. It would still be further interesting to have an overlay of economy growth and total GNP.

I think that it will show that the tax cuts spur economic growth that leads to higher tax revenues. That means we are still on the wrong side of the Laffer curve.

[Mr. Harley]

Ted, I checked your first link (I can't look at the attachment, the firewall I'm behind right now is a pain with links or attachments). The problem is that the US economy has some major problems shaping up, as Shogun nicely summarized.

If you look at the steady deterioration of Great Britian as a world power, you will see scary similarities between the two countries. Trade deficits, falling salaries, a steady deterioration in the value of the currency, etc. If the world goes to a Euro based economy, oil becomes denominated in Euros, Japan and China start dumping their 100 billion plus in treasury bonds, WTO prevents the US from protecting our economy from non-free (but technically legal under WTO) trade practices by other countries, etc. we could go the route of the old Soviet Union or Great Britian and have several years in not a couple of decades of a stagnant or even contracting economy. If that happens watch the vaunted US defense system deteriorate.

Just look at what the Europeans have done with Airbus industries. Two US makers of commercial aircraft have left the market - Lockheed and McDonnell-Douglas - with the resulting damage to export trade, military-industrial complex etc Please note that neither company is blame free, but Airbus is like Microsoft. With the government cushion they can weather their mistakes, but if their non-supported competitors make a mistep, they're out.

Add in similar types of government semi-sponsered consortiums in the European defense industries, and competition from Israel, Russia, and China, and it's not a given, especially with an economic contraction, that we will be able to maintain a world class military. Especially if the boomer retirement "breaks the piggy-bank" as it were. Do you really believe the grey panthers will sacrifice their retirement checks to strengthen the US military? Try to get a local tax-increase for schools passed, and look at the demographics who vote against.

[Ned]

Shawn, I would like to see a chart like DanS's wrt Britain before I would draw any conclusions by comparing the US with Britain. The Brits were brought low by two world wars which forced them into sell everything they owned and by post war socialism.

[Timexwatch]

I remember going round and round with Sava, IIRC, a few months ago about this, but to repeat Dan:


NEOCONS DO NOT HAVE A DOMESTIC POLICY!

NEOCONS DO NOT HAVE A DOMESTIC POLICY!

NEOCONS DO NOT HAVE A DOMESTIC POLICY!

NEOCONS DO NOT HAVE A DOMESTIC POLICY!


Call them Neopaternalists, call them insane, just stop calling them Neocons.

[Mr. Harley]

[Mr. Harley]

Seriously, Ted, that's like our disagreement over Truman and the bomb. I have been able to find no comprehensive anaylsis on the web on that period for GB, and the books are esssentially going to be academic research. I still owe you the raincheck on Truman (and Marshall, I haven't forgotten) !

I thought you might like the aerospace industry reference. Seriously, though, I've been watching our industries get screwed over by stunts like the Airbus thing, or China not floating it's currency. As long as the US refuses to take action, then our position in the world will continue to deteriorate. That and our support of nasty dictatorships, that almost always turns out generating long-term ill will for us.

[DanS]

That's not true Dan. The new medicare drug benifet, the massive increase in farm subsidies, big increases in education, and numerous other spending programs have been championed by Bush. Taxing less is part of the problem but his out of control spending is a much bigger problem because it is increasing at a historically fast rate.

Is so true, when you look at it properly (spending as a percentage of the economy). You can have increases in all of these spending programs and it won't change the fiscal picture of the United States, so long as the economy grows fast. Next year, this growth is likely to afford a nearly 8% overall increase (5.7% real growth + ~ 2% inflation; $175 billion) without changing the fiscal picture.

http://www.forbes.com/technology/newswire/2003/12/11/rtr1178504.html

If you figure that federal gov't workers and our soldiers are getting only a 4-5% raise, you will see that Bush is already ratcheting back the spending somewhat.

That said, we can't count on that kind of economic growth for long. In light of that, I'm watching for the impact of the programs that you mention. Besides, I want to see gov't spending as a percentage of the economy to go down, especially during good economic times.

[Ned]

Originally posted by shawnmmcc
Seriously, Ted, that's like our disagreement over Truman and the bomb. I have been able to find no comprehensive anaylsis on the web on that period for GB, and the books are esssentially going to be academic research. I still owe you the raincheck on Truman (and Marshall, I haven't forgotten) !

I thought you might like the aerospace industry reference. Seriously, though, I've been watching our industries get screwed over by stunts like the Airbus thing, or China not floating it's currency. As long as the US refuses to take action, then our position in the world will continue to deteriorate. That and our support of nasty dictatorships, that almost always turns out generating long-term ill will for us.

Shawn, it is always a pleasure to joust with you. You seem to be dedicated to the truth. A really honest person.

As to Airbus, if they get subsidies, Boeing can complain to the WTO. If they win, we can impose retaliatory tarriffs.

Even before WTO, dumping historically has been against US law and is subject to private remedies at the ITC.

[Ned]

Originally posted by Kidicious


No, they were demand side cuts.

Kid, please provide evidence of this statement that the cause of the increased revenues post-Kennedy tax cut was related to something else than the tax cuts themselves. The only event we know of at the time was the tax cut. Dan's chart shows an immediate drop in revenue - followed in subsequent years by sharp increases. Your statement that the increase is not due to the tax reductions is simply an unsupported statement.

[Imran Siddiqui]

That's also a succinct analysis of Neocon domestic policies

Necons have a domestic policy? That's news to... well neocons .

[Kidlicious]

Originally posted by Ned


Kid, please provide evidence of this statement that the cause of the increased revenues post-Kennedy tax cut was related to something else than the tax cuts themselves. The only event we know of at the time was the tax cut. Dan's chart shows an immediate drop in revenue - followed in subsequent years by sharp increases. Your statement that the increase is not due to the tax reductions is simply an unsupported statement.

The increased revenues were the result of the tax cuts. It's just that they were designed to increase consumer spending. Study Lapher's theory and the Kennedy tax cuts a bit and you will see why.