Surplus NOT from Capital Gains Receipts (Re: Krugman qualitycontrol

Max Sawicky sawicky at epinet.org
Wed Jul 26 07:00:54 PDT 2000


After arguing unsuccessfully w/facts or logic, NN keeps arguing . . .

"If Clinton is responsible for all macro-economic results, he is responsible both for booming growth and the unequal distribution of income - which is all of the surplus. . . . "

Nobody says he is responsible, except maybe you. We seem to have segued from the merits of deficit reduction to the partial merits of inequality.

" . . . If we assume that all he had control of was actual government regulations, meaning in this case the tax code, what the 1993 tax bill is responsible for is making sure that a large chunk of that wealth going to the wealthy from the boom was taxed back for public use."

Nobody was arguing about that, tho that your definition of "large" is open to debate.

"If the top rate had not been raised from 31% to 41% in 1993, the surplus would be much smaller or nonexistent."

Now we're back to where we started, w/o benefit of any new information.

"That seems like the bottom line on assessing the effects of any policy.

Using "but for" analysis of the effects of tax cuts or hikes is hardly radical. It is exactly what Citizens for Tax Justice and other liberal groups did in the 1980s in assessing the responsibility of the 1981 tax cuts for the deficit back then."

Yeah but that's not what you've done. You have no counter-factual. everything that's happened since 1992 is Clinton's doing, evidently, except little things like the '97 tax act.

" . . . And the reality is that for all the talk about the "surplus", it is pretty ephemeral. Any kick in the economy and most of it will melt away pretty quickly. So a little fiscal restraint rhetoric while the GOP controls the purse springs is gives the hand to veto all the GOP tax giveaways to the wealthy."

Looks like a case of cognitive dissonance here. First the rate increases are a big factor in the big surpluses, then "any kick" in the economy kills the effects of the rate increases.

As I've reported a number of times, the projections factor in a full recession, which certainly subsumes "any kick in the economy."

As to the power of fiscal restraint rhetoric, we are dangerously close to seeing one or more of the GOP tax cuts pass into law.

Nathan, I would like citations as to whether you have ever conceded a point on LBO.

mbs



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