Re: The Magic Bullet

On Dec 13, 2010, at 2:58 PM, Mike Findlay wrote:

>> I don't think it is that easy of a case.  The economic growth of  
>> the past decade
>>
>> (the 2000s) has been largely not a result of lower tax rates, but  
>> of increasing
>
>> debt.  It has been growth pulled forward by borrowing from the  
>> future.  Illusory
>>
>> wealth.  As for the other periods, I think there are also other  
>> explanations,
>> especially with the 20's.  The 80's growth was largely a result of  
>> gov't
>> deficits, and spending especially wrt defense.<
>
> Doesn't that assume that govt. spending, whether deficit spending or  
> not, fuels
> economic growth?  I'm not sure I buy that.

Yes.  In fact, deficit spending probably fuels growth more, because it  
is spending new money that didn't exist before.  Spending of taxpayer  
dollars only recirculates the existing money already in circulation.   
It just redistributes it to the gov't favored businesses.

> Arguably the problem started in 1987 with the nomination Alan  
> Greenspan
> as Fed chairman.  His hypocrisy, (claiming to be an Randian  
> Objectivist while
> continually priming/bailing out Wall Street with cheap and easy  
> money),
> bordering on fraud, was exposed shortly after the "Crash of 87" when  
> he said
> that the Fed :
>
> "affirmed today its readiness to serve as a source of liquidity to  
> support the
> economic and financial system".

The problem with the Greenspan easy money philosophy ultimately is  
that it is willing to let bubbles form through free markets (to the  
point of ignoring fraud) however they weren't willing to let the bad  
players fail and pay for their mistakes.  I can almost buy the notion  
that the free market will regulate itself against fraudulent players,  
however when the government allows and even rewards the fraudulent at  
the expense of the honest players, then the whole system is fraudlent  
and will collapse under its own weight eventually.

> He must have been a fan of the show In Living Color because his  
> response to
> every sign of trouble on Wall Street was to print mo money, mo  
> money, mo
> money and practically give it away to the grifter class.   His  
> monetary policies
> are largely responsible for turning this country's financial system  
> into a
> snobbier and more rigged version of Vegas.   If I can get billions  
> from the Fed
> at ridiculously low rates regardless of my ability or willingness to  
> repay those
> billions what incentive do I have to act responsibly with that  
> money?  Any
> street corner bookie knows you take the biggest gambles with easy  
> money.

exactly.  Perverse incentives that create imbalances that eventually  
collapse.  The thing is, it is still going on right now even more than  
before!  Nothing has been changed!

> If that's all it was it would be bad enough but I'd gamble like ten  
> drunken
> sailors on shore leave after pay day if I knew I could count on my  
> sugar daddy,
> (sorry, Greenspan doesn't merit well crafted metaphors), to cover my  
> losses.
> Which is exactly what has continually happened.  Lost your bank roll  
> on that
> stupid ponzie scheme of a bet?  Don't worry about it there's plenty  
> more cheap
> money where that came from - we'll just feed 'em the line that your  
> too big to
> fail.

Right...and then when it comes time to pay the piper...they trot out  
moral justifications for taxpayer austerity.
I call bullshit.

>>> That said, I'm not opposed to lower taxes on the wealthy (or  
>>> anyone for that
> matter).  I think fairness in tax liability should be the order of  
> the day.  <<
>
> Fairness in tax liability is an oxymoron.

True.  But If you must rob us, at least rob us all in the same way,  
such that it impacts us similarly.

regards,
-Lance


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