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fib_1618

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Reply with quote  #1 

http://tinyurl.com/c5s3amd

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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

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whereismyorange

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Reply with quote  #2 
If the economy is growing and private GDP is increasing, raising tax receipts may not necessarily raise the total federal receipts as a percentage of private GDP. Although this might be difficult if the trend over the past 2.5 years continues with overall GDP being mostly flat at ~2.5%. I think it's quite clear that the fiscal problem must be solved by both cutting expenditures and increasing revenue. This increase in revenue doesn't have to come only from letting the Bush tax cuts expire. This increase in revenue can also come from closing tax loopholes where the Republicans may actually relent.

There is one thing I did not quite understand. How is this evidence.
Quote:
Furthermore, the corrosive effects of having federal tax receipts up too high really was being felt in the 1990s, even if it did not show up in the GDP numbers.  The total number of issues listed on the Nasdaq actually peaked all the way back in December 1996, more than 3 years ahead of the final price high for the Nasdaq Comp.


Tom mentions mentions the technology boom (bubble). The majority of those bubbly companies which were started and went public eventually went into bankruptcy. The number of issues traded on the Nasdaq were the same the same in 1992 and 2002 after the recession. Since 2002 this number has continued to sink, even with a much lower lower ratio federal receipts to private GDP ratio. His reasoning doesn't make sense.
Quote:

Clinton rode a huge technology boom, that not only increased economic productivity but also led to huge investments in startup companies.  That decade also saw the Baby Boom generation in its peak entrepreneurial years, whereas now those aging Boomers are starting to slide into retirement rather than starting new companies.
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