Uncommon Knowledge with Thomas Sowell

this election is a test not just of opposing candidates but of the voting public today on uncommon knowledge the author of that quotation one of the most influential economists and authors of our time dr. Thomas Sol uncommon knowledge now welcome to uncommon knowledge I'm Peter Robinson be sure to visit us on our website at Hoover oo RG /uk or on facebook at facebook.com slash UNC knowledge facebook.com slash Punk knowledge the author of more than 30 books end of a syndicated column that appears in more than 200 newspapers Thomas solo holds degrees from Harvard and the University of Chicago and has taught economics at institutions including Cornell Amherst and UCLA now a fellow at the Hoover Institution dr. Sol has just released a new offering a revision just in time for the election of his famous essay trickle-down theory and tax cuts for the rich Tom welcome quote this election is a test not just of the opposing candidates but of the voting public you wrote that this past summer explain yourself well it's not just a question that what the administration is doing the question is the extent to which the public understands what they're doing not only on particular issues like medical care or things like that but about the whole way the country is governed that is if you can have a president who by executive order can nullify acts of Congress can decide that some portions of the law that he likes will be enforced and other portions that he doesn't like will not be enforced then we no longer have the separation of powers and we have the executive acting as the overruling of power in the nation you've also written again this past summer quote if this if this year's election is going to be decided on the basis of hard facts the Obama administration is doomed yes what do you mean by that well the hard fact is that you've had this enormous length of time that unemployment has been up above 8% and none of the expect extraordinarily expensive things have been done it made a real dent in it and if people were going buy things like that and if they're going about what's happening internationally that's not even counting the most recent things today of American ambassador being killed in a country that's supposed to be going through the Arab Spring is the eyes eyes as the administration says that Iran is going towards nuclear weapons with no sign whatever of slowing down North Korea's already got them other countries are siding with with our enemies so so what you said what you're saying is that this election more than most yes represents a test of the democratic experiment whether we can govern ourselves absolutely all right and if by some miracle we get through we have a good sense to remove this president the question is well we have learned a lesson or will we turn off our common sense when there is the first woman president you know the first Asian president the first Latin president I mean I we so hung up on symbolism that we don't understand that being president of the United States means having the lives of 300 million people in your hands and the future of people yet unborn if we don't understand that and we're willing to vote for people on a basis of symbolism then we're lost Tom let's apply common sense to one of the festivals of democracy the Democratic National Convention first lady Michelle Obama she begins by describing her father and Barack Obama's grandmother as decent people hard-working people who sacrificed for her families and then she says this when it comes to rebuilding our economy Barack is thinking about folks like my dad and like his grandmother he's thinking about the pride that comes from a hard day's work that's why he signed the lilly Ledbetter Fair Pay Act to help women for equal why he cooked taxes for working families and small businesses and fought to get the auto industry back on its feet he brought our economy from the brink of collapse to creating jobs again jobs you can raise a family on good jobs right here in the United States of America President Obama is giving us quote jobs you can raise a family on Tom you know anyone say it's like it's like being a mosquito at a nudist colony you don't know where to start we're not gonna be in the air long enough did this act all the falsehoods that this woman is put into those few words give us 100k the job is that you can raise a family on the new jobs that are being created are disproportionally very low income jobs so I don't know how you're gonna be raising a family on minimum wage type jobs or flipping hamburgers at McDonald's the other thing is that what is implicit in all of this is that the economy has no recuperative powers of his own that all the benefits all whatever recover there have have been has been due to Barack Obama it's like the scene of Genesis where he's breathing life into the clay of the account that's it now anyone who studied history knows it for the first 150 years of this country the federal government did not intervene when their economy turned out and all that time the downturns all corrected themselves one of them one of the most one of the most classic examples was running the warren g harding when he his first year at office he found the unemployment rate at eleven point seven percent he did absolutely nothing and he did not spend more government money he cut back up and spending the Federal Reserve had the interest rates up at six or seven percent not down at one percent where they are now the next year unemployment was a six point seven percent the year after that it was two point four percent so the economy has recuperative powers I mean employers have an incentive to hire people workers have an incentive to get jobs Linda's ever centers delenn they don't need somebody in Washington trying to micromanage all of this your argument is not only weak form of the argument we don't need Barack Obama to breathe life into the economy because it'll recover on its own sooner or later if struck Obama stays out of that's what I'm saying the strong form of the argument is Barack Obama's actually been holding it down no question I mean there's never been a recovery other than that of the Great Depression of the 1930s that took so long under Ronald Reagan Reagan in the early years we got up to nine point seven percent annual unemployment he did absolutely nothing the media went crazy the unemployment came down and he kept right on coming down right all right so common sense use your head one common sense question is what went wrong how did we get into this mess in the first place and Bill Clinton once again at the Democratic National Convention explained the answer yes in Tampa the Republican argument against the president reelection was actually pretty simple pretty snappy it went something like this we left him but total mess he hadn't cleaned it up fast enough so far him and put us back in the Republicans created the mess is truly a masterful politicians and to be a masterful politician you have to have a lot of brass and it takes an incredible amount of brass for Bill Clinton who was the big who was the biggest factor in creating the housing boom that led to the bus that brought down the whole economy it was during the Clinton administration that the federal government forced lenders to change their lending standards which had been in place for decades and it made real estate one of the safest investments around bringing those standards down and order they can get the numbers that they want for low-income minority etc mortgage applicants Barney Frank the ranking Democrat on the House Committee that oversaw Freddie Mae and Fannie Mae Freddie Mac and Fannie Mae said quote I'm willing to roll the dice yes on Freddie and Fannie meaning he would see what taking he'd be willing to take the chance that the standards were being brought down to low more than that General Janet Reno under the can under Clinton threatened lenders was legal with legal action from the Justice Department if their numbers terms of groups in and income levels of people who were approved didn't fit her preconceptions HUD under under Clinton took will made loss lawsuits against lenders charging them with racial discrimination based solely upon statistics so Tom give me for the layman a three sentence summary it's a sound bite kind of summary of what caused the mess we're in it was not a failure of the market it was a failure of the government forcing people to lower lower the lending standards that had existed for years and they say well the problem was blamed on greed you don't satisfy greed by lending to people who can't pay you back all right us since you insist once again that if we based this election on the facts the Obama administration would be quote doomed but listen to President Obama himself last clip from the Democratic National Convention landscape that new energy can power our future that new schools can provide ladders of opportunity to this nation of dreamers if you believe in a country where everyone gets a fair shot and everyone does their fair share and everyone plays by the same rules that I need you to vote this November all right new plants and factories new energy new schools and a fair shot what's wrong with that III wanted the fair shot includes the taxpayers but we've had we've had things we've had factories before there was Barack Obama uh hard as that is to believe you know and we've had less of it since he came in okay Tom so let's let me ask this question which is politically incorrect which makes it all the more important to ask some component of the voting public voted for him last time around as an act of national expiation because they felt and I frankly I can I could feel it myself we were all proud even those of us who supported the opponent we're all felt proud the following day that the United States of America the Constitution takes slavery into account the Civil War but finally we have a black man as president of the United States all right that's perfectly understandable we under we know that took place four years later what about the argument that it is so important for him to get this right so important as as a continuation of this national act of expiation and healing and so forth that in some way it's only right to give him frankly more slack than you might permit of action for president well there you go I suppose that's what it amounts to I guess you don't buy that one well when you realize that the president United States has the lives of 300 million people in his hands he has the future of restless civilization in his hands he has the freedom that has been inherited over the centuries in his hands and he's already starting to dismantle that I really don't think this it's a question of any individual whoever's in the White House being cut me slack the last thing you need to do is cut slack to people who have power over 300 million other people all right significance like for those 300 million people segment to trickle-down theory and tax cuts for the rich thomas soul and his new booklet quote at various times in places particular individuals have argued that existing tax rates are so high that the government should would collect more tax revenues if it lowered those tax rates close quote explained that argument oh the argument is based on the belief that people will rule change their behavior as you change the tax rates those are the left often act as if human beings are just like inert blocks of wood or like chess pieces you can move around on it on a chess board to put wherever you want to carry out some grand design but of course people react to to these things now it's a theory it's a hypothesis and you could test it almost never is it tested people then people instead say oh you just want to give tax cuts to the rich right now you note in in this booklet a brief as it is you cover a lot of ground here you write about various times in places people have advocated this and you note several in particular Republican Treasury secretary Andrew Mellon argued for lower tax rates in the 20s Democratic President John Kennedy argues for tax cut cuts in the tax rates in the 1960s Republican President Ronald Reagan lower tax rates in the 80s and then George W Bush lowers tax rates once again in the 2000s for experiments as and were won by a Democrat in each of those four cases what was the effect on the economy the effect of the economy was to increase the rate of growth increase the revenue received by the government the rich not only paid more taxes after the tax cuts for the rich as they call it they paid a higher percentage of all taxes then this started back in the 1920s in the early twenties the tax rate on the top income was seventy seventy three percent the ruler and the people making over a hundred thousand dollars paid something like thirty percent of all taxes by the end of the decade the tax rate on the top had been cut to twenty four percent people making over a hundred thousand now paid sixty five percent of all taxes and the reason is quite some that when you have the tax rate at 73% people simply don't pay it they put their money into tax-exempt securities and arrange their financial affairs so what we're really talking about it do you want a symbolic high tax rate on the high income people the tool to win votes politically which they wish the rich themselves are not not gonna pay or do you really want more tax revenue coming into the government so the argument you say it's it's it's an empirical matter contested it has been tested four different times and it always worked yes right all right in trickle-down theory and tax cuts for the rich you quote such liberal heroes progressive heroes as Woodrow Wilson and John Maynard Keynes on the importance of keeping tax rates modest the Keynes quotation is especially striking quote John Maynard Keynes taxation may be so high as to as to defeat its object a reduction of Taxation will run a better chance than an increase of balancing the budget close quote then you Tom Sola right at this point there was not yet a sharp partisan difference on lowering high tax rates close quote when did this sharp partisan difference emerge what happened in the second half of the twentieth century and on account of what I guess over time the Democrats move further and further left and so you had in the party only those people who thought it was wonderful to raise tax rates on high high income people segment three trickled down and millionaires now the attack on this theory which has been tested and shown to work President Obama in December of last year the market will take care of everything they tell us jobs and prosperity will eventually trickle down to everyone else in April of this year during the Bush years the wealthy got wealthier what prosperity sure didn't trickle down in July this past summer for Barack Obama we've tried it their way it didn't work we were told that prosperity would start at the top and then trickle down close quote where does this trickled where does this phrase trickle-down come from oh I don't know it was as far back as uh as the first Roosevelt administration there is absolutely it is an incredible like thing it's there is a non-existent theory that is constantly being attacked some years ago in my newspaper column I challenged anybody to cite any economist I was sided with an insane asylum who had ever made that argument nobody ever came up with a single person so when Barack Obama says in this past July quote we were told that prosperity who told him nobody told him nobody no economist has ever held no politician has ever said it I don't know of anybody who's ever said in fact when I put this out and I went out a nationally syndicated column various people wrote me and said well so-and-so said that so-and-so said it but find me the person who said it I don't want to hear how a said that be said find me be and show me where he said it and that was years ago not one example has been offered all right so trickle-down economics is not a political theory it is a political I beg your pardon it's not an economic theory it is a political hack phrase used as a caricature caricature in other words the argument really is not that they that you should put more more money in the hands of the wealthy it's also a point of a zero-sum conception of the economy there's the thought that if you cut the tax rates on the rich why then there'll be less taxes for the government or you'll have to raise the taxes on other people to make up the difference or cut programs and so forth so that that that I hear all the time it drives me crazy so what so what about this notion George Bush it was a giveaway that George Bush cut taxes on the rich and if he had not done that the budget would be much closer to Bali was just giving it in the paper I point out where the New York Times itself says you know there's been an unexpectedly large increase in tax revenues from the wealthy and from corporations which is reduce the projected budget deficit and the question yes expectations are in the eyes of the beholder unexpected by the New York unexpected by than the New York Times exactly but that's exactly what people have been expecting for more at that point 3/4 of a century and which has been happening in the New York Times just chose not to understand it President Obama once again at the Democratic National Convention addressing he might as well he and his speech writers might as well have composed this passage for you Tom soul President Obama talking to Tom oh now I've cut taxes for those who need it middle-class families small businesses but I don't believe that another round of tax breaks for millionaires will bring good jobs to our shores or pay down our deficit I don't believe tax cuts for millionaires will bring jobs to our shores or pay down our deficits so there Tom there you are it so happens that both those things happen in the 20s after Mellon finally got his tax cuts on the and they were across the board tax these were not tax cuts for millionaires but it was precisely after the tax cuts that the government revenue increased and they brought down the national debt by about 1/4 as a result of the money pouring into Washington Governor Romney at the Republican National Convention and fifth we will champion small businesses America's engine of job growth that means reducing taxes on business now raising them governor romney that was the fifth of a five-point economic plan he has proposed during the campaign reducing all personal income tax rates by 20 percent but in this his full dress speech to the convention and the nation he never mentioned tax cuts the closest he came was tax cut rate rates cutting tax rates the closest he came was talking about this reducing taxes on businesses that we just heard so what are we to make of that he actually has something of the position you're arguing he ought to have but he doesn't want seem to want to talk about it well that's that's the problem with Republicans that they really don't go out there and and make the case you know they're right they like to be right in secret that's right okay segment four here the stakes Tom sold this past summer quote the America that has flourished for more than two centuries is being quietly but steadily dismantled by the Obama administration close quote now you note the way the Obama administration has used executive orders to waive provisions that the No Child Left Behind Act and to repeal your word the legal requirement that welfare recipients must work he's the president tom doesn't he get to make adjustments in this law or that law well he didn't the oath that he took office was that he would faithfully execute the laws now I don't think they meant to execute in the same way that the Mafia means it thomas sole on obamacare quote obamacare imposes huge costs on some institutions while the president's waivers exempt other institutions from having to pay those same costs the law says you've got to do this and over here we have the Secretary of Health and Human Services granting a waiver to this person or that entity or this waivers taking place over here well it's legal nobody seems to sued them for that one of the great problems is that people do not react I mean when all is said and done the Constitution of the United States is a set of words on pieces of paper the only way that the Constitution can protect us is if we protect the Constitution if we rise up and revolt if we vote out of office people who violate the Constitution then of course it will mean something if people can do this say a few pretty words and we say oh well then the Constitution will over time erode to the point well it will mean absolutely nothing there'll be nice words on paper but people with power will just do what they feel like what about those nine people in black robes who sit in on the bench across the street from the United States Capitol isn't it the job of the Supreme Court of the United States to defend the Constitution it is but they alone can't do it I'm more importantly you know Obama gets reelected he's probably gonna have one on me be to more members to a point and from that point on it would just be a rubber stamp for whatever he chooses to do the fundamental champion of the United States Constitution must be the people absolutely if they don't care yeah it'll be it'll be walked already we have the Senate violated an explicit rule in the Constitution that each year they must present a budget to the poor to the public it's been three and a half years without a budget now that's right now as long as no one does anything about it it'll it'll go on whenever it's inconvenient for the any administration to reveal what they're gonna do then the other they simply won't present a budget all right from the constitutional argument to the economy Tom Sola quote we are not yet Greece but we are not exempt from the rules of arithmetic that caught up with Greece we have just a little more time close quote so what's going to go wrong let's assume Brock Obama for them for the moment let's assume Barack Obama wins reelection what bad things happen for one thing we start running out of money chuttan that's the problem of Greece see that a secret of the welfare state is you can do almost anything in the short run juggling money from here to there and so on but in the long run the arithmetic can't be ignored and in the long run you're gonna run out of money which is what's happened in Greece which is starting to happen in Spain and which can happen in the United States so so you're an optimist that is to say the welfare state against which you've devoted enormous professional energies over lo these several decades now is about to come to an end one way or the other that's right there but it makes a difference how it comes to an end okay so that's that's what I'm trying what what what feels do I mean look we have eight point eight point something or other percent unemployment as a matter of fact if the same number of people were still in the workforce as where when President Obama took office the unemployment rate would be eleven percent the economy is really bad but by historical standards it's still wealthy country people can get by journalists are already defining the state of affairs is the new normal so really four more years of Barack Obama does what to us we can we can so we can skate by Tom the question is how long can you skate Greece discovered in that there that does come a point where there is no more money in Spain people are already leaving Spain and drove and taking their money out of the out of the Spanish banks with them one of the one of the things that you good you can do in the long run they'll be forced to do is simply print more money and as they present a print more money that is simply a hidden form of Taxation I mean when the Federal Reserve creates money to buy government bonds and keeps the interest rate low in order which make the price of the debt service low what that means is that if you have your money put aside in the bank and and and and you're getting 1% and the inflation rate is 3% that means they're taking 2% of your savings every single year and you know how compound interest is and even under the deterrent conditions and $100 bill in 1998 would not buy as much as a $20 bill would have bought in 1960 so there the thievery that goes on through inflation it's huge even when inflation is relatively modest that's right all right a segment 5 tipping point we've talked about the politics and economics of the present moment but I'd like to ask you about deeper changes in the nature of the country itself this past summer you wrote this sentence heartbreaking sentence it is painful for me to realize that youngsters growing up in the same places in Harlem where I grew up more than 60 years ago have far less chance of rising economically educationally or otherwise close quote yes why do they have far less chance they dress in better clothes they have color televisions they're watching now and if that was what makes for success we'd be in good shape they don't get a decent education I mean III had to pay a lot of money from my daughter to go to a private school to get an education almost as good as I got public school when I was growing up in Harlem no so public education is declined illegitimate see percentage of children born out of wedlock in 2009 among african-americans 72% Hispanics over half among whites more than 1/3 and the and of course all of us have been rising rising remarkably steadily the line just continues the effects of illegitimate sea on American life there are two things there there's the lack of oh it's the one parent family right the illegitimate sea is by the way we can measure it statistically right but if you have you had you know I wouldn't use to be called common law of marriage and which wives stayed together for the whole time there'd be two parents right so what you were really measuring is one parent family that's right okay that's right my gosh that mean to crime statistics almost any statistics you look at people are raised in one parent families by mothers the crime rate among them is vastly greater the poverty rate is vastly greater if you look at black husband-wife families their poverty rate has been in single digits every year since 1994 so it's not race it's not ethnicity it's whether you can manage to stay married that's right all right once again Tom soul this past summer quote Harlem was not an idyllic community by any means but it had values that mattered in our daily lives and common decency was in fact common the sense that the moral grounding of American life is dissolving absolutely why is this you know you read some people who say it's capitalism it's the free market that tends to dissolve the values that make the capitalism possible in the first place how long it took capitalism to have that effect and it only had that effect after the welfare state came in and that was true on both sides of the Atlantic if you read a Theodore Dalrymple stories a little of the white lower class and Britain you think he's talking about the worst ghettos in the United States and none of the factors that are supposed to explain what's happening in the ghettos the United States apply to the white working-class in Britain what's the similarity is that in both cases you had the welfare state in two intellectuals create an atmosphere that undermined all sense of self responsibility which said that all kinds of morality was just was just a joke and if people start believing that then they'll behave in ways that make it impossible to have a decent life last question about the underlying changes in the country my friend John hinder Acker rights on the power line blogs site and he was as we taped this today who knows a week from now or two weeks from now but as we tape this today the election is fundamentally tied between Obama and Romney and John Henry rocker wrote this election should be a cakewalk for the Republicans he agrees with your point yeah that if it were just being decided on the facts Obama would be doomed why isn't it I'm afraid writes John hinder record the answer may be that the country is closer to the point of no return than most of us believed with over 100 million Americans receiving federal welfare benefits millions more going on Social Security disability many millions on top of that living on entitlement programs not to mention enormous numbers of public employees we may have gotten to the point where the government economy is more important in the short term than the real economy yes quote every word of that rings true - yes yes the Republicans I think have a notion that because so many people are unemployed and on food stamps that that is a as a negative for Obama Franklin D Roosevelt was elected in a landslide after having an unemployment rate higher than Obama's the there was not a single month in the first term of Franklin D Roosevelt when unemployment was not in double digits and in a number of months the unemployment was over 20% and he won the biggest landslide in American history so the people who think that the economy is the key that you can't win if you're unemployment is 8% forget it so folks like you in me you can remember 1980 the election of 1980 Reagan versus Carter and there's a lot of talk that this is the most consequential election in 2012 since 1980 but things are worse now than they were in 1980 the underlying fundamentals of the you'd agree with that absolutely all right so a moment ago I asked how America would be different if President Obama were re-elected and your answer is we're we move very quickly toward Greece question how was the country different if Mitt Romney is elected how to what extent can he address well the immediate economic problem but how to what extent can he go deeper and address the underlying moral problem that to break up of the family the these difficulties we've been discussing well I don't think that in that he's able to do that in one term I think if he can if he can just stop the it's less as if someone could have plugged the leak on the Titanic that's what that would have been better that would have been a lot better yes all right okay so the so that so so your agenda for Mitt Romney and you believes two questions is this your agenda for Mitt Romney and is it within the ambit of actual possibility if he's elected one fix the economy in the short term no no I don't want him to fix the economy I want him to stop politicians from trying to fix the economy that's what's caused the problem when we when we have we had 150 years when nobody thought it was the president's job or anybody else in the government's job to fix the economy the economy fixed itself all right a couple of days ago I put up a post on ricochet letting people know that I'd be interviewing you and asking Ricochet members what questions they'd like to hear you address and there were dozens of replies but one theme and the theme was this ask dr. Sol what grounds he sees for optimism tom well I'm not usually the dispenser of optimism I'm asking you to force yourself it's tough but I'll try I think Romney knows that all these bright ideas of it instantly coming up with in Washington have a negative effect even if the ideas themselves aren't so terrible because what it means is that if you're gonna invest let's say just for three years and you're gonna take three years to pay off you don't know what the rules are gonna be of the game we're gonna be three years from now and Obama has stocked the federal bureaucracy with people who think it's their job to come up with unending lists of bright ideas to stop mortgage foreclosures just to do this to do that to do the other there are no rules and you and the one thing that has been crucial to economic prosperity here in other countries and in other centuries has been having a set of dependable rules under which people can invest because investment means putting money out right now in hopes of getting it back you haven't you don't when you don't have that hope course you don't know what what new costs will be imposed on you and so forth then you hang on to your money this idea that the Federal Reserve has to create more money at a time when both the banks and businesses have record-breaking amounts of money sitting idle the question is why is it idle its idle because they are afraid to invest it all right last question mm-hmm you've become famous in recent years for remarking famous to me anyway that you're not terribly worried about the country's future because you're no longer worried about the future now I'm not going to let you do that you've got grandchildren for that matter we know that this program is especially popular among college students so let us ask about the 18 19 20 21 22 year olds who are watching this program and saying well alright dr. Sol may have turned 80 but I'm young I value of Liberty I want to do what I can to preserve this Republic what is your advice to them Oh God Oh number 1 get up get out there and vote and vote Obama out of office before you makes things even worse Social Security is not gonna be there for them the way the way it is set up right now something is gonna have to be done now anyone who's proposes doing something will be accused of being heartless and wanting to get rid of Social Security now arithmetic we'll get rid of Social Security if you don't do anything so it's not a question you don't have it you don't have the option to just let Social Security keep going people this is the reason for the welfare states of Europe being in such turmoil riots in the street and austerity and uh unemployment rates over 20 percent and so on is the chickens have come home to roost you have unfunded mandates out there you pray you essentially promise people thing it's like giving them both a generous check knowing that there's not enough money in the bank to cover it and now we're discovering that the hard way and it's only a matter of time before the younger generation get there and discover that all the money they paid into Social Security went to pay the pensions of the previous generation as well as other spending by watch so what's really pernicious about the welfare state as it as it nears the edge of the cliff and as we see it breaking down in Greece is that people very understandably plan their lives around the notion that they'll be getting such-and-such a check for this and that they'll be getting health care for that and then suddenly they discover that their plans are worthless they've built their lives on certain expectations so your advice to these 20 year olds would be plan on reality not on what the government is saying not not on the government's lies about the welfare state that will always be there to take care of you is that fair absolutely and particularly in a case of Social Security that what they need to do is put their money someplace where politicians can't touch it that's what that's the whole island no no no that's the that's the argument for putting it into private accounts you see every effort if a private insurance company does what the Social Security system does you can put the people in behind bars in a federal prison course you you they have to have enough assets to cover their liability otherwise it's they're breaking the law that's right Congress can do that but the private people can't and that's why you shouldn't have the money subject to Congress's direct control but put it somewhere else all right so the rallying cry with which we closed today is photobomber out yes all right haha dr. Thomas sole author of most recently this marvelous essay trickle-down theory and tax cuts for the rich thank you Tom thank you I'm Peter Robinson for uncommon knowledge thanks for joining us [Music] you [Music]

Channel: Hoover Institution

Views: 225,961

Rating: 4.8861098 out of 5

Keywords: HooverInstitutionUK, economics, affirmative action, taxes, wealthy, Greece, tipping point

Id: YPEQMJ0w2qI

Length: 39min 52sec (2392 seconds)

Published: Sun Sep 16 2012

Reddit Comments

[u/Tobar7]

It's a question of Rich People Consumption being Economically Worse then Government Taxation, and then Government Investment in the Infrastructure of the nation. It's roads, bridges and people( Education and Healthcare ) are all Productive uses of Capital.

Match that against Rich people tax avoidance schemes, where they move their money out of the country, to No Benefit to the nation, and then their consumptive spending, on bigger Yachts, Rolex, and high speed cars, or, even more economically deteriorating, burying their dogs in diamonds.

Government spending, through taxation, improves the economy for all. The problem is Republicans can't see the bank-shot effect of the improving economy and nation. They're the me-me-me party, the takers, who want it now, not a payback through a stronger Economy or Nation.

[u/[deleted]]

I'm always a little confused at the general mindset out there that seems to say, "Government should be taking the maximum money it can." Personally, I want the government to be taking the minimum it can.

[u/treyisnotdead]

This is a classic case of correlation being mistaken for causation.

[u/parachutewoman]

But the increased revenue did not equal the decreased tax receipts, so deficits went up. This is a deceptive article. http://en.wikipedia.org/wiki/United_States_public_debt

[u/infinite]

Increased revenue? Tax receipts are always increasing, due to inflation alone. To anyone who says this, ask them to point out a year where tax receipts decreased. That's always fun.

edit s/rates/receipts

[u/fireman451]

For Reagan and Bush at least the expansion of debt financing probably added a fair bit to the revenues via the taxation on the new money created once it was respent after government purchases. Essentially a Keynesian kick if you will.

I don't know if that would cover the whole number however.

[u/luxuries]

Dear God did the debt ever increase under Reagan

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