[Nesster]

Which makes more sense?

The Ongoing Disgrace That Is Obamanomics - Forbes

President Obama has led America into an accelerating downward spiral. Destination: Argentina. Last Friday’s calamitous jobs report was just a signpost on the way.

Argentina enjoyed the world’s fourth highest per capita GDP in 1929, on par with the U.S. at the time. But then the nation lost its way through its embrace of a leftist, union allied government, which took control of the economy and imposed wildly irresponsible taxes, spending, deficits and debt. After World War II, the hugely popular Juan Peron came to power and institutionalized the madness. It has been all downhill for Argentina ever since. Sound familiar?

...

While Obama and his propagandists claim 27 consecutive months of job growth, employment growth is the norm and not the exception for the American economy. In the 62 years from the end of World War II in 1945 until 2008, jobs grew in 86% of the months, or 640 out of 744. But Obama and his propagandists think you are too stupid to know the country you live in. They know at least their MSNBC base will believe them.

Reagan’s recovery produced job growth in 81 out of its first 82 months, with 20 million new jobs created in those first 7 years alone, increasing the civilian work force at the time by 20%. That grew into 50 million new jobs over the entire Reagan 25-year boom from 1982 to 2007. Compare that to the disgrace of Obamanomics. While Obama likes to claim 4.3 million new jobs created, total jobs by May, 2012 were still over half a million less than in January, 2009 when he entered office. Even George Bush oversaw 52 consecutive months of job growth, including 8 million new jobs created after his 2003 capital gains and dividends tax rate cuts became effective (which Obama is dedicated to reversing)

...

But we know Obama loves the poor, because his policies are creating so many of them. Census reports that almost 1 in 6 Americans is poor, higher than when the War on Poverty started in 1965, with 49.1 million Americans suffering poverty, the highest in the 51 years that Census has been tracking poverty. The 45 million Americans on food stamps is also an all-time record. Hispanic poverty at 28.2% is higher than African-American poverty at 25.4% for the first time ever. Yet with this poverty and unemployment record, Obama tells Hispanics they should be voting for 4 more years of him.

An all time record of 47% of Americans are now government dependents receiving some form of government benefits. Yet virtually half of all Americans (49.5%) pay no income tax. Census reports the national home ownership rate at 65.4% is the lowest in 15 years. African American home-ownership under Obama has fallen 30 percentage points below white home ownership, the biggest difference in 20 years, and one of the biggest on record.

This sorry record is the disgrace of Obamanomics. But the greater disgrace is that Obama came into office pretending not to know anything about the spectacular success of the new supply side economics since Reagan adopted it in 1981. Instead he went all the way back to the failed Keynesian economics of the 1970s that Reagan and all other thinking people left for dead when it managed to create both double digit unemployment and double digit inflation at the same time.

Keynesian economics is the doctrine invented in the 1930s, holding that what drives economic recovery and growth is increased government spending, deficits and debt. If you have been listening to Obama the past 3 ½ years this will sound familiar. And if it sounds nuts, that’s because it is. Borrowing a trillion dollars out of the economy, as Obama did with his stimulus, to spend a trillion dollars back into the economy, does nothing to advance the economy on net.

...
But what drives economic recovery and growth is not government spending, deficits and debt, but incentives for productive activities, like savings, investment, expanding businesses, starting new businesses, job creation and entrepreneurship. Those incentives come from reduced tax rates (not tax credits and deductions), reduced regulatory costs and barriers, and stable, sound money. These are the policies of the new supply side economics of Reaganomics, which achieved the supposed impossible in solving double digit inflation and double digit unemployment at the same time.

Obama should have known that as well. But instead he has play acted the role of Rip Van Winkle, going back to the Keynesian economics of 1970s as if nothing has happened since. This is why he should not even be running for reelection, let alone drawing any support after this gross public policy malpractice.

But he is the beneficiary of the rise of the New Irrationalism vibrant in the New Left Democrat Party, as featured on MSNBC. That New Irrationalism empowers its followers to deny established facts, to accuse anyone who professes the facts of lying for money, and to denounce anyone who disagrees with them as immoral and corrupt.

Fortunately, that New Irrationalism infects only a modest minority of the American people. America is not Argentina. The American people are not going to follow Obama’s American version of Juan Peron, and vote for the decline and fall of America. What is happening instead is the revival of the real America, which this year will vote for vast Reagan Republican majorities, and a new age of American politics, which will complete the Reagan revolution.

He's certainly not shy about expressing his opinion
So now for the other side:

It?s time to bury supply-side economics - Howard Gold's No-Nonsense Investing - MarketWatch

NEW YORK (MarketWatch) — It’s been the prevailing economic philosophy of the Republican Party since Ronald Reagan was elected president in 1980.

Supply-side economics held that reducing marginal tax rates would spur economic growth, create jobs and even generate tax revenue for the government

And it makes sense in theory: If people keep more of what they make, they would logically work harder, spend more and hire more people, right?

When you listen to supply-siders like Arthur Laffer, Stephen Moore and Larry Kudlow, they always extol the Kennedy-Johnson tax cut of the 1960s and especially President Reagan’s tax cuts of the 1980s.

But they rarely mention the 1990s or the 2000s.

Maybe that’s because those two decades were almost a perfect controlled experiment that shattered their pet theories: President Bill Clinton raised marginal tax rates and the economy boomed and jobs were plentiful. President George W. Bush cut them and we got only modest job growth.

In fact, there’s more and more evidence suggesting that lowering marginal tax rates doesn’t create many jobs at all.

For years I’ve tried to find any economist — left, right, or center — who could estimate the number of jobs created by the Bush tax cuts, but without success.

So, I’m taking a crack at it myself.

Tax hikes vs. tax cuts
Using data from the Bureau of Labor Statistics CES survey, I compared the number of jobs created in the years following the balanced budget bill signed by President Clinton in August 1993 and after the second round of Bush tax cuts, which went into effect in May 2003. (Supply-siders think that was the real deal, not the earlier 2001 cuts.)

Nearly 20 million private sector jobs were created from the August 1993 tax increase until the end of the Clinton administration in December 2000. The number following the Bush tax cuts, in a shorter time period (May 2003 to December 2007, when the Great Recession began), was above seven million.

But when I actually counted the jobs created in various industries and eliminated those that clearly had nothing to do with lower marginal tax rates, I was left with a much smaller number: two million at most, a dreadful performance by any measurement.

This isn’t an academic exercise. A 20% cut in marginal tax rates, including reducing the top tax rate to 28% from 35%, is a key plank of Republican presidential candidate Mitt Romney’s economic growth plan (along with cuts in business taxes and reduced regulation, which I won’t cover in this column).

...

Yet there’s a growing consensus that cuts in marginal income-tax rates don’t deliver the goods:

Robert Moffitt and Mark Wilhelm found “no evidence” that high-income U.S. taxpayers increased their work hours in response to the 1986 Reagan tax cuts. This undercuts a central premise of supply-side economics, that cutting taxes gives people incentives to work more.

A 2010 report by the nonpartisan Congressional Budget Office found that cutting income taxes produced the least bang for the buck among 11 proposed policy options aimed at boosting employment

...

But the most striking evidence is the glaring contrast between the 1990s and 2000s.

A 2008 study by the liberal Center for American Progress and Economic Policy Institute showed that private investment, GDP, wages, household income, employment and federal revenue all grew faster — sometimes much faster — during the high-tax Clinton years than they did during the low-tax Reagan and Bush eras.

In August 1993, President Clinton signed a law that boosted the top personal income tax rate dramatically, to 39.6% from 31%.

But rather than die out, the nascent economic recovery picked up speed and never looked back. By the time this giant boom ended, the U.S. economy had added nearly 20 million private-sector jobs in every sector from manufacturing to retail trade to finance to information technology.

Of course, higher taxes didn’t cause this boom. That’s the whole point: other economic forces were so powerful that marginal tax rates didn’t matter.

And they didn’t matter a decade later when President Bush signed the second of two tax cuts in May 2003, accelerating the 2001 act’s provisions, reducing the top rate to 35%, and cutting capital gains and dividend tax rates.

But something else was brewing: In July 2003, the Federal Reserve cut the federal funds rate to 1% and kept it there for a year.

By doing so, the Fed pumped hot air into a speculative real estate bubble, with far-flung effects. As Martin N. Baily, Susan Lund and Charles Atkins wrote in a 2010 paper for the McKinsey Global Institute:

“From 2003 through the third quarter of 2008, U.S. households extracted $2.3 trillion of equity from their homes in the form of home-equity loans and cash-out refinancings. Nearly 40% of this — $897 billion, an amount bigger than the 2008 U.S. government stimulus package — went directly to finance home improvement or personal consumption.” (Italics added.)

The two Bush tax cuts caused an estimated $1 trillion loss of federal tax revenues — and each year the revenue shortfall is an additional $100 billion. It’s the gift that keeps on giving.

[statistics and tables]

...

Supply-side economics is not the only economic philosophy that has come up short in the Great Recession. As I wrote here last year, Keynesian stimulus and Friedmanesque monetary policy both haven’t done the job.

Surely supply-side economics worked better when the top tax rate was slashed from 70% to 28% under President Reagan. It might be more justified at the state level, where crippling tax burdens have made some states uncompetitive. And raising taxes too high would likely hurt growth, so it may work better in reverse.

But clearly this is a theory with diminishing returns that has outlived its usefulness.

Because after the last two decades, believing that cuts in marginal personal tax rates will create jobs and revive our economy is like still believing the sun orbits the earth.

Ok so typical Liberal reality-based hope: if they just saw the data they too would understand!

[jolepp]

Heh, heh ... fair and balanced ... how about this: to properly motivate the job-creators, marginal taxes should be higher, e.g. double the taxes and the job-creators will work twice as hard to come up with the level of income they feel entitled to. It has to be the marginal tax rates though, otherwise the ordinary people making up the workforce, being the moochers they are, will starve to death making the motivation exercise as well as the heroic endeavors of the job-creators pointless.

[Nesster]

Quite so joepp - lower marginal tax rates are a subsidy on the marginally creative plutocrat. It sets the bar too low. We get incompetents, crooks, and grifters where we should have only the best and brightest of humanity

[jolepp]

Indeed. That should separate the wheat from the chaff, the genuine job-creators from the fake ones. With this little adjustment I'm confident that supply-side economics will work beautifully. If not, it simply means that marginal taxes are too low.

[Ratmagiclady]

It's funny how the cons keep spinning that drivel, while complaining it's somehow unfair that the poor don't pay enough income tax, (They specify income tax: in total, lower income people pay as much or more when you add up *all* the taxes we pay) while claiming the poor need the most 'motivation' of all.... but also apparently complaining this has the opposite effect on poorer people than it does on ultra-rich ones.

Who they practically want us to worship and appease as 'The Job Creators' ...Which they never in fact do, regardless of how much they're handed. Or for how long. Maybe they're projecting something.