I still do not understand how any economist can make the claim that Bush’s tax cuts are good for the economy.  The majority of the money goes to people who are so rich, that they do not spend any of it, because they have no need to, they drop it into savings.  The richest 1% of the US save 98% of all money saved in the US.  And even if the rich person was going to spend it, they will likely go on a vacation somewhere.  And when your filthly rich you go to expensive European locations and such.  I doubt that the majority of the tax cut money is being spent within the US or being spent at all, but that is hard to prove or disprove either way.

Just remember, reality has a well known liberal bias.

There are so many economic fallacies in that one post that I could not possible spend the time fisking it. Please buy and read a book on economics. I would recommend Principles of Economics by Greg Mankiw. You should find it acceptable because:

1. It is the most popular econ 101 text today
2. Mankiw is a liberal who has criticized supply-side economics
3. The guy even named his dog Keynes! (the arch-liberal economist).

Nevertheless even a liberal keynesian like Mankiw has recognized that classical economics is “the real economy in the long run” (as compared to Keynes who said that in the long run we’ll all be dead.)

After you read and absorb his book, your economics will get much better.

Were you referring to my comment or the actual post by Les?

Both. :p

Where you going to point out anything specific or just make a blanket statement?  If you are referring to my stats I mentioned above, those are both out of my Economics book my teacher used.  I do not have the book on me as I am at work right now, but if you want I will post the author title and page numbers tonight.  As far as the book you listed, I would rather use the economics I have learned from my economics teacher and text books, all of which actaully know what they are talking about.

Regardless of whether the tax cuts are a net benefit or net drain on the economy (dropping money into savings is not necessarily a bad thing), the effect is a drop in the bucket compared to overall spending increases.  At best, it’s like ordering a caffeinated diet soda with your third helping of cake.

Dropping money into savings is never a bad thing.  But as far as the economy is concerned, saving does very little to stimulate the economy.  Think of it this way.  If we had two individuals A and B, A has an annual salary of close to 10 million has almost no debt and lives a cushy life.  B has an annual salary of 20 thousand and has almost 30,000 in debt due to old college loans and credit cards.  If you give them both 10,000 dollars what would each individual do with that money?  There is no way to know for sure, but B is going to probably use that money to buy something nice that he couldn’t afford before, maybe a new car, and will probably pay off his debt as much as possible.  A will take that money and likely drop it into savings, why?  He can already afford a new car.  He has no debt.  If he wants to go on a vacation, assuming he has vacation days available, he can already afford it.  As most studies show, people with a lot of money, get that way by saving it, and spending very little.

This economics textbook that you like so much - despite not knowing its name or the author - is clearly suspect. Keynesians have abandoned fiscal policy and the multiplier effect along with the paradox of thrift. Yet the analysis in your post is predicated upon both of those:

1. Saving money is bad for the economy (this *used* to be a keynesian position). Since rich people save money, we need to tax them in order to stop them from saving. The government can be trusted to spend rather than save the money.
2. The negative incentive created by the taxes are overwhelmed by the multiplier effect of spending the money. A side effect of taking that position, is that it predicts that an international trade war or a complete emargo on all trade would be a great thing for the American economy.

These are two old planks in keynesian economics that even Sameulson eventually rejected.

And while we’re on the subject, I took a quick peak at your blog. Your minimum wage post should include a discussion on the earned income tax credit. You should also discuss the 40% unemployment rate of young muslims in France, which has a $9.00/hour minimum wage. Racist French? Or the fact that strong minimum wage laws create a high barrier to entry into the labor market? You make the call.

If you want to debate what I post on my blog, then comment there, don’t bring it up here, this is not the forum.  If I wanted people to debate what I write on the website’s of others, you would see me post on other people’s websites more often.  But nice try at trying to make me look like an asshole.

As far as you attempting to dispute what I wrote, so far you have not made one claim that shows fallacy in what I wrote.  All you have said is “that used to be a Keynesian position.” The point I make is quite simple.  Stop giving money to the rich that don’t need it. 

I am not talking about communism where everyone gets the same but George’s tax cuts are ridiculously skewed to one end of the spectrum.  An article in Times magazine showed that a family of four pulling in $250,000 a year, from Bush’s tax cuts, will get enough money to buy a new car.  A family of four making $20,000 get enough money to buy a crappy toaster, roughly $75.  Cut back on the tax cuts to the rich and to large businesses and give it instead to those that really need it and to small businesses.  That within itself would stimulate the economy.  The simple fact that we are at war should be reason enough to not have tax cuts, or at least cut them back. 

But for my textbook, like I said I will post author and page numbers later tonight, I do not carry every book I have ever used in my classes with me everywhere.

Awwww. Justin doesn’t like my entry. Somehow that doesn’t bother me in the least.

I don’t claim to be all that knowledgeable about economics, but I do know the difference between a surplus and a deficit and when the deficit is still the fourth largest ever recorded it’s hard to get excited that it’s not worse than anticipated.

Macroeconomics: 
Macroeconomics: Principles, Problems, and Policies by Campbell McConnell

Microeconomics:
Microeconomics: Principles, Problems, and Policies
by Campbell McConnell

Each textbook was for my Macroeconomics and Microeconomics classes respectively.  I took one class in the Fall 2002 and Spring of 2003.  Surprisingly I still remember a lot from the classes, I guess I tend to remember content from classes I enjoy more.

Oh I almost forgot, and Justin, I take it since you never voiced your opinion on my website about the post you referred to previously I take it you were just trying to be a fucking dick.

Your minimum wage post…

And this just shows further how you are being an dick because my post wasn’t about minimum wage, it was about Capitalism and Socialism, but I guess you don’t really care, you just wanted to make me look like an asshole huh.