Is the US economy in recession?

[Ben Kenobi]

The mistake being increasing temporary food stamps and unemployment benefits? Hogwash.

Temporary? No, Kid. The spending is permanent. You keep arguing that the spending is 'eventually' going to be cut, but never specify when. How much is enough, Kid? 4 years of spending? 8? 25? Your lifetime?

[Ben Kenobi]

Let's say, hypothetically, the top marginal tax rate was 90% and the government cut it to 70%, leading to additional tax revenue. Would this qualify as a free lunch? Or did everyone win?

Well, according to Kidicious - "no one knows".

[Kidlicious]

Temporary? No, Kid. The spending is permanent. You keep arguing that the spending is 'eventually' going to be cut, but never specify when. How much is enough, Kid? 4 years of spending? 8? 25? Your lifetime?

The spending will be cut as the economy expands. It requires no government action.

[Kidlicious]

Well, according to Kidicious - "no one knows".

No. You're on your own.

[Ben Kenobi]

The spending will be cut as the economy expands. It requires no government action.

Which is why spending has gone up every single year since 1947? *Bzzt*, wrong answer.

[Ben Kenobi]

No. You're on your own.

So, you were lying when you said, "no one knows".

As for the aforementioned example - what happened when Kennedy did the same? The economy expanded and tax receipts went up as people got to keep more of their money and less was taken by the state. Why don't they cut taxes to zero? Because this effect only works when taxes are too high. It's not a free lunch.

My argument against QE is that the debt is too high for QE to be effective. Ergo, borrowing money will not really improve things for the US at this point in time.

[giblets]

So, you were lying when you said, "no one knows".

As for the aforementioned example - what happened when Kennedy did the same? The economy expanded and tax receipts went up as people got to keep more of their money and less was taken by the state. Why don't they cut taxes to zero? Because this effect only works when taxes are too high. It's not a free lunch.

My argument against QE is that the debt is too high for QE to be effective. Ergo, borrowing money will not really improve things for the US at this point in time.

It's not a free lunch to cut taxes now. It was at one point when taxes were very high. The whole point is that free lunches exist.

[giblets]

If monetary policy is too tight and we're in a depression, then with quantitative easing we're looking at another free lunch. And the money is simply created, not borrowed.

[Kidlicious]

Which is why spending has gone up every single year since 1947? *Bzzt*, wrong answer.

Wrong again. They decreased in 48, 54, 55, 65, and 2010.

edit: and that's in current dollars. I didn't bother with constant dollars.

http://www.taxpolicycenter.org/taxfa....cfm?Docid=200

[Kidlicious]

So, you were lying when you said, "no one knows".

Please quote the whole sentence.

[Ben Kenobi]

I didn't bother with constant dollars.

So by your own admission it hasn't happened in close to 50 years. Thank you. I rest my case. 50 years is not 'temporary.' And you have to use constant dollars, otherwise, it makes no sense. Spending less than the rise in inflation doesn't count as a 'cut'.

[Ben Kenobi]

The whole point is that free lunches exist.

Except that they don't. TYVM.

[Ben Kenobi]

If monetary policy is too tight and we're in a depression, then with quantitative easing we're looking at another free lunch. And the money is simply created, not borrowed.

Monetary policy is contributing to the lack of economic recovery.

[Kidlicious]

So by your own admission it hasn't happened in close to 50 years. Thank you. I rest my case. 50 years is not 'temporary.'

You rest your case by saying that 2010 is 50 years ago. Very good. End of discussion.

[Ben Kenobi]

You rest your case by saying that 2010 is 50 years ago. Very good. End of discussion.

What budget? There was no budget passed in 2010, Kid.

Obama's claiming a purported 60 billion dollar cut, on a deficit of 1.3 trillion. Or about 4 percent of the deficit. Seems mythical to me.

I'm going to wait for the actual budget numbers not estimates.