If Bush is considered 'What is Republican'...

[Imran Siddiqui]

Every significant reduction of the outstanding debt has been followed by a depression, and every depression has been preceded by significant debt reduction.

late 1990s? Are we in 'depression'? Nope.

correlation—even where perfect—never proves causation.

Yep.

There is nothing which says that increasing surpluses, as a result of prosperity, correlates to depression. The ONLY reason that trend may exist is because the economy may have grown too fast and the resulting downturn is that much bigger (ie, the bubble has burst).

Since the Great Depression, there are safeguards in effect to prevent the huge depression. Therefore, what happened before it has no influence on what came afterwards.

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O. Boris . Indeed. Sometime we'll have to pay the piper.

[Ned]

Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

[Ogie Oglethorpe]

Originally posted by Ned
As I said, it is interesting how the parties seem to have switched on this issue. Historically, Republicans have been balanced budget/surplus freaks.

Its politics, Whoever can use it to discredit the other party at the time for purposes of re-election.

My gripe of course is the bloat of government and massive new wave of social entitlement programs under the current administration, that did not have to occur..

[Imran Siddiqui]

Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

Because there is NO basic principle that surpluses harm the private economy! If the economy does really bang up job and we get tax revenue surpluses, which we use to pay down the debt... that'll HURT our economy?

Sorry, that's just dumb. Show me some economic data which proves this (ECONOMIC date... not political articles.. seeing as I did graduate with an economics degree).

[Ned]

Originally posted by Imran Siddiqui

Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

Because there is NO basic principle that surpluses harm the private economy! If the economy does really bang up job and we get tax revenue surpluses, which we use to pay down the debt... that'll HURT our economy?

Sorry, that's just dumb. Show me some economic data which proves this (ECONOMIC date... not political articles.. seeing as I did graduate with an economics degree).

The only thing I have to rebut your bald statement are facts.

[Ned]

Originally posted by Ogie Oglethorpe


Its politics, Whoever can use it to discredit the other party at the time for purposes of re-election.

My gripe of course is the bloat of government and massive new wave of social entitlement programs under the current administration, that did not have to occur..

Better the Republicans than the Democrats who would have introduced price controls. You know what that would have meant to the future of our pharmaseutical industry.

[Imran Siddiqui]

The only thing I have to rebut your bald statement are facts.

Which facts? All you've shown is that there may be some correlation, which can be explained away by the boom/bust cycle before progressive taxation came into being. Causation anyone?

[Kidlicious]

Originally posted by Ned
Imran, I don't have any idea why you ignore the basic principle that deficits stimulate the private economy and that surpluses harm it.

Tax revenue increases with economic growth, sometimes even as a percent of GDP. For example, some people move into higher tax brackets. That does not cause a decrease in spending, because peoples incomes are still larger. The principle you want to inforce is the principle that people's spending increases and decreases proportionally with their income, but that doesn't support the assertion you are making about surpluses.

[Lawrence of Arabia]

Loosening the money supply is Keynesian. The orthodox economists wanted to stay on the gold standard.

wtf? the use of monetary policy to influence the macroeconomy is a monetarist viwe. keynsians think that G should be used to increase AD.

[Kidlicious]

Originally posted by Lawrence of Arabia


wtf? the use of monetary policy to influence the macroeconomy is a monetarist viwe. keynsians think that G should be used to increase AD.

No, I'm sorry you're wrong. Keynes was the first to advocate monetary policy to bring the economy to equalibrium. He also advocated fiscal policy, and said that sometimes monetary policy wouldn't work, in which case fiscal policy should be used. But he certainly never said that the money supply should be contracted during a recession.

edit: the monetartists didn't even come into the picture until after the GD.

[Lawrence of Arabia]

no, actually YOU are wrong. Keynes is known for advocating public spending to increase AD. and where did i say the money supply should be contracted during a recession? what happened in the depression is that banks went bush, tightening the money supply. all they had to do is either a) decrease the rediscount rate or b) decrease the reserve requirement. no sweat. that is not keynsian, that is monetarist.

[Kidlicious]

Originally posted by Lawrence of Arabia
no, actually YOU are wrong. Keynes is known for advocating public spending to increase AD. and where did i say the money supply should be contracted during a recession? what happened in the depression is that banks went bush, tightening the money supply. all they had to do is either a) decrease the rediscount rate or b) decrease the reserve requirement. no sweat. that is not keynsian, that is monetarist.

Wanna bet?

[Ned]

Originally posted by Kidicious


Tax revenue increases with economic growth, sometimes even as a percent of GDP. For example, some people move into higher tax brackets. That does not cause a decrease in spending, because peoples incomes are still larger. The principle you want to inforce is the principle that people's spending increases and decreases proportionally with their income, but that doesn't support the assertion you are making about surpluses.

All true. But this says nothing at all about whether there is a deficit or surplus.

[Kidlicious]

Originally posted by Ned
All true. But this says nothing at all about whether there is a deficit or surplus.

Deficits and surpluses themselves do not determine spending, only total income determines spending. Is that what you mean?

edit: clarified first sentence.

[Ned]

Imran, you ignore the fact that all prior depressions followed a period of surpluses. You ignore that all prior recessions since WWII have followed a period of reductions of deficits even into surpluses. The longest period without a recession since World War II was a Reagan boom from 1982 to 1990, a period characterized by large deficits.

What caused the recession that began in 1990?

Does anyone remember a famous tax increase enacted by the Democrats with Bush's Dad's consent?

What structural reforms, other than guarantees of bank deposits, were implemented to stave off a depression caused by a collapse in asset values and rampant deflation?