Skip to comments.Committee Searches for Economic 'Tipping Point'; Prefer Not to Find It
Posted on 09/24/2011 9:41:42 AM PDT by Son House
"We know that the debt is now 100 percent -- approximately 100 percent of (gross domestic product)," said Allan Meltzer, a professor of political economy at Carnegie Mellon University in Pittsburgh. "That doesn't include the unfunded liabilities. It doesn't include (mortgage lenders)Fannie Mae and Freddie Mac. It doesn't include a number of other things."
Chris Edwards, Director of Tax Policy Studies at the Cato Institute, a libertarian think tank in Washington, argues that U.S. debt is so far out of control that it must be contained soon.
"We've had five trillion (in) deficit spending since 2008, the most enormous sort of Keynesian stimulus you can imagine, and yet we've had slower growth than any time since World War II. So I don't think spending helps."
Meltzer pointed to three "fiscal changes that really did enormous good." One was the tax cuts from the Kennedy and Johnson administrations, the most effective part of which were business tax cuts.
"They got the biggest bang for the buck," he said.
The second were the Reagan-era tax cuts which came in two rounds and boosted a flagging economy. Meltzer said a completely different option worked well too.
"(The) third policy that gave people confidence were the Clinton tax increases, which assured people that their future tax rates were not going to go up, that they had seen what they were going to have to take, and there wouldn't be anymore."
Meltzer said the increases gave people certainty about what tax rates would be, which reassured businesses they wouldn't go higher, allowing employers to plan and create jobs with confidence.
"Oh, absolutely," he said. "I think probably all three of us agree there is a tipping point and we don't know where it is, and it would be prudent not to find out."
(Excerpt) Read more at foxnews.com ...
Democrat Cummins seems to be reading the Democrat talking points verbatim. Laura Tyson, my gosh ‘Growth over spending cuts”?
Where’s the GROWTH, Democrats?
I would like to remind Allan Meltzer, a professor of political economy, the Fed has been trying to save the economy for years...
"And that's your definition of Too Big To Fail right there: the biggest banks are not only getting bigger, but their risk exposure is now at a new all time high and up $5.3 trillion from Q1 as they have to risk ever more in the derivatives market to generate that incremental penny of return."
Meltzer says (paraphrased)
inflation has begun to rise,
Fed policy misguided
Enforceable inflation target from the FED
No shortage of money and liquidity.
No spin there.
Investopedia explains Deadweight Loss
Minimum wage and living wage laws can create a deadweight loss by causing employers to overpay for employees and preventing low-skilled workers from securing jobs. Price ceilings and rent controls can also create deadweight losses by discouraging production and decreasing the supply of goods, services or housing below what consumers truly demand. Consumers experience shortages and producers earn less than they would otherwise. Taxes are also said to create a deadweight loss because they prevent people from engaging in purchases they would otherwise make because the final price of the product will be above the equilibrium
You may wish to try to ping your folks on this one too, and thank you!
Also, See Cummins’ question about Clinton tax increases at 58:22 , seems what libs leave out is the Republicans balancing the budget cut spending, don’t run deficits, and tax increases are not advisable now. Cummins must be depressed learning that, next Cummins is trying to assert that Austerity(frugality) is going to have a negative effect.
Negative risk at 81:10, debt, recession;
Q: Is delaying the Affordable Health Care Act something this congress should take on immediately?
Margret Thatcher at about 87:00 mins
92:00 mins, Cummins schooled on infrastructure, my own question; why have Democrats wasted so much time and money as they claim infrastructure is so bad?
Meeting adjourned at 98:00, so starting at 20:00 the actual meeting is about 78 minutes, and well worth it for the uninformed(read some Democrat supporters, as others will not be influenced by reality)
Thanks Son House for the ping.