5 ms·

You're entirely right, government spending does not harm economic growth.

by jolux 10y ago

badsock 10y ago
I can't tell if you're being sarcastic, but I think it's important to note that if you make the reductio ad absurdum argument that a tax rate of 100% has strongly negative effects, sure I'll go with that, but if there's a claim that what we have right now is either too much or too little, then there needs to be some sort of evidence to support that claim.
- bottled_poe 10y ago
  > "a tax rate of 100% has strongly negative effects" Could you elaborate?
  - badsock 10y ago
    I'm saying that I wouldn't argue that communism (in the sense that all value produced is publicly owned) is a good economic system.
- repsilat 10y ago
  There's another pole to reductio towards, though -- governmental spending increases without commensurate increases in taxation. I don't know enough macro to know what the resulting inflation would look like, what would happen to interest rates or exports or quality of life etc etc... No doubt mainstream economists would be aghast at the thought (it isn't a mainstream idea, after all -- our recent stimulus has been monetary, not fiscal, and it's only meant to be a short-term thing) so it's probably not such a crash hot idea either.
CountSessine 10y ago
Not to champion austerity (and no, I'm really not championing austerity), but if increased spending is paid for with increased borrowing, government bonds will complete in capital markets and make borrowing generally more expensive for everyone. Of course right now capital is ridiculously cheap and the economy still isn't doing very well...
- vacri 10y ago
  And government projects improve people's ability to work, whether it's by education or welfare, or negotiating trade treaties, or protecting trade routes (military). For example, the US gets immense economic benefits from it's oversized military, being able to lean on people to give it favourable terms - something to remember for the people who want to 'stop being world cop' (a self-imposed role, taken to improve it's economic power).
- deleted 10y ago
  [deleted]
- damptowel 10y ago
  The amount of GDP going to paying of debt is historically high, it's a huge drag on the economy. http://static.cdn-seekingalpha.com/uploads/2012/5/10/saupload_428250-13363801587809994-Michael-Clark.png http://static.cdn-seekingalpha.com/uploads/2012/5/10/sauploa...

You're entirely right, government spending does not harm economic growth.

by jolux 10y ago

You're entirely right, government spending does not harm economic growth.

I can't tell if you're being sarcastic, but I think it's important to note that if you make the reductio ad absurdum argument that a tax rate of 100% has strongly negative effects, sure I'll go with that, but if there's a claim that what we have right now is either too much or too little, then there needs to be some sort of evidence to support that claim.

bottled_poe 10y ago
> "a tax rate of 100% has strongly negative effects" Could you elaborate?
- badsock 10y ago
  I'm saying that I wouldn't argue that communism (in the sense that all value produced is publicly owned) is a good economic system.
repsilat 10y ago
There's another pole to reductio towards, though -- governmental spending increases without commensurate increases in taxation. I don't know enough macro to know what the resulting inflation would look like, what would happen to interest rates or exports or quality of life etc etc... No doubt mainstream economists would be aghast at the thought (it isn't a mainstream idea, after all -- our recent stimulus has been monetary, not fiscal, and it's only meant to be a short-term thing) so it's probably not such a crash hot idea either.

CountSessine 10y ago

Not to champion austerity (and no, I'm really not championing austerity), but if increased spending is paid for with increased borrowing, government bonds will complete in capital markets and make borrowing generally more expensive for everyone. Of course right now capital is ridiculously cheap and the economy still isn't doing very well...

vacri 10y ago
And government projects improve people's ability to work, whether it's by education or welfare, or negotiating trade treaties, or protecting trade routes (military). For example, the US gets immense economic benefits from it's oversized military, being able to lean on people to give it favourable terms - something to remember for the people who want to 'stop being world cop' (a self-imposed role, taken to improve it's economic power).
deleted 10y ago
[deleted]
damptowel 10y ago
The amount of GDP going to paying of debt is historically high, it's a huge drag on the economy. http://static.cdn-seekingalpha.com/uploads/2012/5/10/saupload_428250-13363801587809994-Michael-Clark.png http://static.cdn-seekingalpha.com/uploads/2012/5/10/sauploa...