5 ms·

Yeah, happened with both monetary policy as you observe, and with Keynesian fiscal policy - deficit spend to cushion and shorten downturns, then contract govt s

Yeah, happened with both monetary policy as you observe, and with Keynesian fiscal policy - deficit spend to cushion and shorten downturns, then contract govt spending and pay down the debt during good times, so that you can afford to deficit spend again in the next downturn. Makes sense in theory, but the second half doesn't always happen b/c politicians like buying votes with govt spending (either via under-taxation or over-spending, to the extent those aren't the same thing).

mjevans 5y ago
Or alternately raise taxes in the good times (rather than interest rates) and pay down that debt... which at least in the US we've got one political party dead set against at all costs.
- deleted 5y ago
  [deleted]
- lumost 5y ago
  A generation ago, progressive cycles of deficit spending and taxation had put the top tax bracket in the US at 90%. Still, there was persistent inflation - and worse high unemployment. The belief was that the Federal Government had grown too large in the economy and needed to be "starved". To what extent government austerity vs. new monetary policy moved the needle for the US economy is unknowable. However many Americans of that generation feel that the starve the beast approach was correct. If you talk to Americans opposed to new taxes, their opposition is usually based on the idea that the government will waste the money in one way or another. Even those on the left in favor of taxes are often in favor of taxes for redistribution purposes. It's rare that anyone pitches the government as competent outside of military spending, and even then there are many asterisks on 10k light bulbs in submarines. If you want Americans to agree to taxes you'll need to change the perception of government competence.
  - jnsie 5y ago
    > It's rare that anyone pitches the government as competent outside of military spending Genuine question - do people see military as competent when it comes to spending?
    - inkeddeveloper 5y ago
      The $2000 leather chair and multiple $3000 tvs my commander ordered for his office to be delivered to Kabul during a war would say no.
    - lumost 5y ago
      Nope, but the military gets a pass in most years as at least being competent. Most Americans believe that most government agencies are both incompetent and profligate.
      - lupire 5y ago
        The US military hasn't won a war in about 20 years.
        rdevsrex 5y ago
        That's too broad a brush. I'm against militarism, but what engagement against conventional forces has the US military lost in the last 20 years? I can't speak to dealing with insurgencies but it's clear to me that a mix of various administrations policies was to blame more than military effectiveness. I mean was it the military or Paul Bremmer and co who disbanded the Iraqi military and unleashed a lot of chaos?
    - xwdv 5y ago
      Given that it’s the most powerful military in the world I would say it’s probably the one place where we have at least gotten our money’s worth.
    - schrodinger 5y ago
      I don't want to say yes but damn if we don't have a lot of military might, and as much as an American I want to say stop spending it who will fill the void? We're probably the least bad of all possibilities, and if you disagree, please teach me because I'm legitimately open minded!
- StevePerkins 5y ago
  > "raise taxes in the good times..." Oh, I know which party he's talking about! > "...and pay down that debt" Huh, nevermind.
  - lupire 5y ago
    Even the extremists admit (thought they try to hide it) the Bill Clinton paid down the debt by raising taxes and cutting military spending by not starting large new wars. Caro insulted Clinton for proposing a $200B/ye deficit, right before Bush 2 issued a one-year addition of $1T in new military spending for his personal vendetta against Saddam Hussein launched on false pretenses. https://www.cato.org/commentary/no-bill-clinton-didnt-balance-budget# https://www.cato.org/commentary/no-bill-clinton-didnt-balanc...
    - StevePerkins 5y ago
      The 90's sure were great, I miss voting for Bill! But those days are long over, and most partisans today seem brutally disappointed in Biden because he's only spent $1 trillion instead of $3 or $4.
- briHass 5y ago
  I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over where you live and the taxation policies at the local and state level. The uproar about this change from Team Blue was palpable; this was clearly a targeted attack on liberal, high-tax areas. The cutoffs for the changes were well above an income level of $150K, which meant it went after the 'rich' that Team Blue always positions as the enemy, but none of that mattered. Nobody wants more taxation when it actually hits their pocketbook. If there's anything the constituents of the two major political parties can agree on, it's that.
  - lupire 5y ago
    Somehow the Red "cut the taxes and spending" never give back the net inflows they take from Blue states.... Blue states have higher taxes to care for their citizens so they have to take less in Federal handouts.
    - TrispusAttucks 5y ago
      There aren't really blue states. Only blue cities. https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.png https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...
      - pugz 5y ago
        What's the distinction? I always assumed "blue states" meant a majority of voters in that state voted blue, likewise for red states. Otherwise you might as well say "there's no blue cities, only blue neighbourhoods" and keep getting more granular down to the individual voter.
        AnthonyMouse 5y ago
        The distinction is that cities are blue and non-cities aren't, as a rule. "Blue states" are just states where the majority of the population lives in cities.

mjevans 5y ago

Or alternately raise taxes in the good times (rather than interest rates) and pay down that debt... which at least in the US we've got one political party dead set against at all costs.

deleted 5y ago
[deleted]
lumost 5y ago
A generation ago, progressive cycles of deficit spending and taxation had put the top tax bracket in the US at 90%. Still, there was persistent inflation - and worse high unemployment. The belief was that the Federal Government had grown too large in the economy and needed to be "starved". To what extent government austerity vs. new monetary policy moved the needle for the US economy is unknowable. However many Americans of that generation feel that the starve the beast approach was correct. If you talk to Americans opposed to new taxes, their opposition is usually based on the idea that the government will waste the money in one way or another. Even those on the left in favor of taxes are often in favor of taxes for redistribution purposes. It's rare that anyone pitches the government as competent outside of military spending, and even then there are many asterisks on 10k light bulbs in submarines. If you want Americans to agree to taxes you'll need to change the perception of government competence.
- jnsie 5y ago
  > It's rare that anyone pitches the government as competent outside of military spending Genuine question - do people see military as competent when it comes to spending?
  - inkeddeveloper 5y ago
    The $2000 leather chair and multiple $3000 tvs my commander ordered for his office to be delivered to Kabul during a war would say no.
  - lumost 5y ago
    Nope, but the military gets a pass in most years as at least being competent. Most Americans believe that most government agencies are both incompetent and profligate.
    - lupire 5y ago
      The US military hasn't won a war in about 20 years.
      - rdevsrex 5y ago
        That's too broad a brush. I'm against militarism, but what engagement against conventional forces has the US military lost in the last 20 years? I can't speak to dealing with insurgencies but it's clear to me that a mix of various administrations policies was to blame more than military effectiveness. I mean was it the military or Paul Bremmer and co who disbanded the Iraqi military and unleashed a lot of chaos?
  - xwdv 5y ago
    Given that it’s the most powerful military in the world I would say it’s probably the one place where we have at least gotten our money’s worth.
  - schrodinger 5y ago
    I don't want to say yes but damn if we don't have a lot of military might, and as much as an American I want to say stop spending it who will fill the void? We're probably the least bad of all possibilities, and if you disagree, please teach me because I'm legitimately open minded!
StevePerkins 5y ago
> "raise taxes in the good times..." Oh, I know which party he's talking about! > "...and pay down that debt" Huh, nevermind.
- lupire 5y ago
  Even the extremists admit (thought they try to hide it) the Bill Clinton paid down the debt by raising taxes and cutting military spending by not starting large new wars. Caro insulted Clinton for proposing a $200B/ye deficit, right before Bush 2 issued a one-year addition of $1T in new military spending for his personal vendetta against Saddam Hussein launched on false pretenses. https://www.cato.org/commentary/no-bill-clinton-didnt-balance-budget# https://www.cato.org/commentary/no-bill-clinton-didnt-balanc...
  - StevePerkins 5y ago
    The 90's sure were great, I miss voting for Bill! But those days are long over, and most partisans today seem brutally disappointed in Biden because he's only spent $1 trillion instead of $3 or $4.
briHass 5y ago
I assume you're taking a swipe at Team Red, but do remember that the recent TCJA had a provision that removed the ability to deduct state/local (SALT) taxes from your Federal taxes due, above a certain amount. One could consider this very fair: if you argue for higher (Federal) taxes, you should pay what's owed, regardless of what you paid to any local governments, especially since you have much more control over where you live and the taxation policies at the local and state level. The uproar about this change from Team Blue was palpable; this was clearly a targeted attack on liberal, high-tax areas. The cutoffs for the changes were well above an income level of $150K, which meant it went after the 'rich' that Team Blue always positions as the enemy, but none of that mattered. Nobody wants more taxation when it actually hits their pocketbook. If there's anything the constituents of the two major political parties can agree on, it's that.
- lupire 5y ago
  Somehow the Red "cut the taxes and spending" never give back the net inflows they take from Blue states.... Blue states have higher taxes to care for their citizens so they have to take less in Federal handouts.
  - TrispusAttucks 5y ago
    There aren't really blue states. Only blue cities. https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.png https://miro.medium.com/max/1127/1*86sURhsiwekHqCuqjbFnkQ.pn...
    - pugz 5y ago
      What's the distinction? I always assumed "blue states" meant a majority of voters in that state voted blue, likewise for red states. Otherwise you might as well say "there's no blue cities, only blue neighbourhoods" and keep getting more granular down to the individual voter.
      - AnthonyMouse 5y ago
        The distinction is that cities are blue and non-cities aren't, as a rule. "Blue states" are just states where the majority of the population lives in cities.