tag:blogger.com,1999:blog-3426800777521979578.post6506323713289623337..comments2024-02-20T19:58:27.733-06:00Comments on Jake's Wisconsin Funhouse: SURPLUS? In GOP's Bubble, sure. In real Wisconsin? Don't bet on itUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3426800777521979578.post-47249765987535265842017-01-19T17:40:53.964-06:002017-01-19T17:40:53.964-06:00Jeff- I think your theory is spot on. I strongly b...Jeff- I think your theory is spot on. I strongly believe that lower taxes on the rich (and especially lower capital gains taxes) encourage the type of gambling that led to the Bubbles that blew up into recessions in 2001 and 2007.<br /><br /> On the flip side, if taxes on the rich and corporate are reasonably high, they aren't using so much effort to gamble and dodge taxes, and companies might actually decide to pay their employees and improve their products, because that's the best way to get ahead as opposed to turning tricks and schemes. It's no coincidence the budget and job growth has been better when taxes on the rich have been higher in the 1990s and 2010s. <br /><br /> And now Drumpf wants to set things up by cutting taxes so we can grow the Biggest Bubble of Bullshit ever!...except interest rates are rising at the same time and we are already near full employment. Uh oh...Jake formerly of the LPhttps://www.blogger.com/profile/15660401299391001751noreply@blogger.comtag:blogger.com,1999:blog-3426800777521979578.post-1699489436861409332017-01-19T10:05:51.411-06:002017-01-19T10:05:51.411-06:00Some years ago, I listened to Thom Hartmann opine ...Some years ago, I listened to Thom Hartmann opine that the boom and bust bubble economy was a function of there being an abundance of cash available to the investment class.<br /><br />Folks with cash naturally look to acquire more cash and so go chasing investments.<br /><br />When the controls on using leverage are weak, and the watchdogs are sleeping or complicit (I'm thinking about the people back in the housing boom who scored toxic mortgage debt pools as safe) they can just keep driving values up making it look like everybody is making money.<br /><br />I recall him further opining that a higher tax threshold and tighter controls on leverage ratios was the brake that the economy needed to grow more steadily and cut the crazy swings we'd been seeing.<br /><br />Seems like at least some of that was done during the Obama Administration.<br /><br />Confession - I'm operating on the fringes of my knowledge here, but it seems to fit with what you're saying.Jeffhttps://www.blogger.com/profile/02427829158996224733noreply@blogger.comtag:blogger.com,1999:blog-3426800777521979578.post-33157110166748475412017-01-19T07:42:37.643-06:002017-01-19T07:42:37.643-06:00Good find on that chart, Geoff. It shows potential...Good find on that chart, Geoff. It shows potential GDP flattening out between now and 2020, meaning a deficit Bubble is the only way 2.5% growth happens.<br /><br /> And as I alluded to, the last time we had 3 years of growth like LFB is predicting? 2004-2006. We know what happened when that Bubble burstJake formerly of the LPhttps://www.blogger.com/profile/15660401299391001751noreply@blogger.comtag:blogger.com,1999:blog-3426800777521979578.post-57769959775351680632017-01-18T22:23:19.084-06:002017-01-18T22:23:19.084-06:00The St Louis Fed's FRED keeps track of potenti...The St Louis Fed's FRED <a href="https://fred.stlouisfed.org/graph/?g=cq5A" rel="nofollow">keeps track of potential real GDP</a> as well as real GDP. That suggests that there's about 1.4% slack in the national economy still.<br /><br />The growth rates suggested, though, would put real GDP at about $150B/yr above potential, and the last time that happened was the housing boom and subsequent bust. And before that, the dotcom boom and subsequent bust.<br /><br />So it's possible to achieve such rates of growth with GOP-style deficit spending, but only at the cost of a subsequent recession as whichever bubble the stimulated unproductive GDP activity found its way into bursts.GeoffThttps://www.blogger.com/profile/17317722272565026078noreply@blogger.com