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Where Does Prosperity Come From?

Discussion in 'Political Discussion' started by State, Jun 29, 2009.

  1. State

    State Rookie

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    Government spending?

    "No nation in history has ever taxed itself or spent itself into prosperity." ~ Burton Folsom Jr. in Creating a Recipe for Recovery

    Hmm. He may have a point, though some think FDR did it in the 1930s with his New Deal.

    I think, though, that in the past ten years that consensus has been breaking apart among historians, thanks largely to revisionist scholarship. Books on the New Deal Not all revisionist history is bad, esp. when many have routinely and reflexively engaged in hero worship toward FDR over the decades. After all, I was instructed by lefty professors that he "saved" capitalism.

    The truth is very different, it turns out.

    (In the 1930s there was John Flynn, but who's heard or read him?)

    What we're now facing, if Prof. Folsom is correct, is The End of Prosperity: How Higher Taxes Will Doom the Economy.

    The authors say (Stephen Moore is very active and used to be with the Cato Institute): politicians today care more about “fairness” and taxing the rich (who already pay most of the income tax anyway) than they do about economic growth.

    The results will be especially punitive to the people who are most presented as in need. The poor.

    What ever happened to JFK Democrats? "A rising tide lifts all boats"? We need that.
  2. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    While there are a few thinkers out there who favor the smaller government approach, the fact is tthe Great Depression ended during a Democratic administration that used liberal policies. In addition, Reagan, though he cut taxes, deficit spent by a far larger sum, and ended the Carter recession. Clinton raised taxes modestly but cut the deficit to end the Bush I recession. Taxes are tool to maintan a complex economy; there are times when taxes need to be low, and times when they need to be higher. I think the ideological approach that taxes must be one way or the other is meaningless because taxes are not a measure of quality of life. They are simply a technical tool for regulating an economy.
  3. State

    State Rookie

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    I agree. Just it wasn't the FDR administration.
  4. Patsfanin Philly

    Patsfanin Philly Rookie

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    The party of Truman and JFK died on the streets of Chicago in 1968. What resulted was a party of special interests ( teachers, unions, trial lawyers) who wield disproportionate influence and force the party to the left...Before anybody jumps on me, the Republican Party has their own laissez-faire special interests ( corporate America)...
    The tax and spend and spend and tax some more will ultimately fail and destroy the economy by marginalizing the tax payers and putting larger and larger burdens on them. At the same time, it will take those at the lower end off the tax rolls, making them beholden to the Democratic party.
  5. Fogbuster

    Fogbuster Rookie

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    FDR borrowed money and printed what he couldn't borrow. Had WWII not occurred -- and always interesting to see how FDR knew the Japanese were going to strike Pearl, much as has been said said that W knew a hit was coming on 9/11 -- would have continued staggering under low employment for decades, in all likelihood.

    WWII saved FDR's borrow-and-spend machine approach. Nothing else.


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  6. Fogbuster

    Fogbuster Rookie

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    Ah-h, don't worry about being jumped on. Once you see who's doing the jumping, you learn how to laugh in new and ever-more-joyful and liberating ways!! ;)



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  7. ljuneau

    ljuneau Rookie

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    So true. FDR's monkeying with the economy basically made the Great Depression longer. His policies cultivated an atmosphere of hightened uncertainty, which is detrimental to any capitalistic economy. Very similar to Obama's policies of today.
  8. mcgraw_wv

    mcgraw_wv Rookie

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    Producing something of value is the only way to prosper. You must be able to generate, and produce something of value that other people want.

    We still lead the world at producing, our latest failures were simply thinking we can create money from money and that will be our prosperity. We leveraged everything on nothing... on producing nothing, but zeros in computers, nothing real behind it.
  9. Fogbuster

    Fogbuster Rookie

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    Production is the ONLY foundation for prosperity. Any else is just smoke and mirrors. And don't look now but the country that produces more than half the world combined is China.



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  10. tanked_as_usual

    tanked_as_usual Banned

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    sorry, dude......the bush recession was techincally over before clinton took office......please be more factual than biased
  11. mcgraw_wv

    mcgraw_wv Rookie

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    I was under the impression, that although we have shipped a lot of junk overseas, we were still the number one manufacturing country in the world?
  12. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    Unemployment was still climbing and our GDP growth was still dropping well into 1992, but you may be correct technically.
  13. tanked_as_usual

    tanked_as_usual Banned

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    except that the inauguration was in 1993, and by that day, unemployment had turned around as did GDP growth......
  14. PatsWSB47

    PatsWSB47 Rookie

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    Well Patters if you want to nit-pick on the unemployment then you have a teeny, tiny point but you are flat out wrong on the GDP.


    http://research.stlouisfed.org/fred2/data/UNRATE.txt

    1992-01-01 7.3
    1992-02-01 7.4
    1992-03-01 7.4
    1992-04-01 7.4
    1992-05-01 7.6
    1992-06-01 7.8
    1992-07-01 7.7
    1992-08-01 7.6
    1992-09-01 7.6
    1992-10-01 7.3
    1992-11-01 7.4
    1992-12-01 7.4

    GDP-Real (Adjusted) United States

    Jan-1991 $7,040.8 53.87%
    Apr-1991 $7,086.5 54.32%
    Jul-1991 $7,120.7 54.66%
    Oct-1991 $7,154.1 54.98%
    Jan-1992 $7,228.2 55.71%
    Apr-1992 $7,297.9 56.4%
    Jul-1992 $7,369.5 57.1%
    Oct-1992 $7,450.7 57.9%
  15. Fogbuster

    Fogbuster Rookie

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    In terms of dollar value and services rendered, this may be true. But in terms of production tonnage I have seen where China leads the world in exports.



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  16. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    The growth rate of the GDP was anemic.

    United States GDP Growth Rate

    At any rate, I'm not sure what we're arguing here. I don't think Clinton's economic policies are particularly controversial.
  17. Fogbuster

    Fogbuster Rookie

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    ... except for his gross acceleration of the disastrous CRA and its destruction of all time-honored rules of mortgage lending. And his decision to sell ultra-secret technology on such things as computer science and especially weapons' technology to the Chinese.


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  18. mikey

    mikey Rookie

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    Johnny Flynn??

    Yeah, I heard of him.

    He was drafted by the Minnesota Timberwolves last week.



    .
  19. Fogbuster

    Fogbuster Rookie

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    Hey, Mikey's back for a cameo!!!



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  20. mikey

    mikey Rookie

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    Thanks, Foggy.

    Great to be back for a cameo! :confused:

    .
  21. Fogbuster

    Fogbuster Rookie

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    Yeah, well, don't be such a stranger.


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  22. mikey

    mikey Rookie

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    Just WHO is this Burton Folsom, Jr. that you are quoting?? :confused:

    Is he the nondescript history professor from the right-wing Hillsdale College?? :confused:

    What does an an obscure right-wing history professor from right-wing nut school know about economic policy?? :confused:



    .
    Last edited: Jun 29, 2009
  23. State

    State Rookie

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    Okay, intellectual snob. I guess you decide which schools meet your criteria. What are those, exactly?

    How's the President of Stanford in a Pulitizer Prize-winning book? David Kennedy wrote _Freedom from Fear_ a few years ago. I read half of it, massive tome. He writes, "Whatever it was, the New Deal was not a recovery program, or at any rate not an effective one."

    From the incomparable Michael Medved, you probably can't countenance him either, he brings up Arthur Schlesinger Jr's _National Experience_, a text Medved studied at Yale, published in 1963. In it Schlesinger wrote, "Though the policies of the Hundred Days had ended despair, they had not produced recovery....The New Deal had done remarkable things, especially in social reform, but the formula for full recovery evidently still eluded it."

    And another book showing the New Deal in a negative light was written by Jim Powell. In _FDR's Folly_, Powell writes, "From 1934 to 1940, the median annual unemployment rate was 17.2 percent. At no point during the 1930s did unemployment go below 14 percent. Even in 1941, amidst the military buildup for World War II, 9.9 percent of American workers were unemployed. Living standards remained depressed until after the war."

    ***Quotes taken from Michael Medved's _Ten Big Lies About America_.

    Of course, if you had looked at the links from Fulsome's website, you'd have seen many sources that may have met your approval, Mr. FDA.

    There is no snob like a liberal snob.
  24. mikey

    mikey Rookie

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    First of all, I am not a liberal snob. :(

    As to Prof Fulsome's assertion that "no nation in history has ever taxed itself ... into prosperity", I am just wondering where the esteemed Professor was living from 1992 to 2000.

    Under the Clinton administration, we had unprecedented 8 years of peace and prosperity.

    And Clinton did it by increasing taxes on the the richest 1% Americans.

    By increasing taxes, he was able to reduce the federal deficit.

    Reducing federal deficit means there was less need to sell treasuries to support the deficit.

    Less demand for treasuries means lower interest, which means lower mortgage rate.

    Lower mortgage rate means lower mortgage payments, which means more disposable income for middle-income Americans.

    More purchasing power for Americans means higher equity values.

    Under Bill Clinton, S&P went from 400 to 1350, for an annual return of 18%.

    Under Bill Clinton, unemployment fell from 7.5% to 4.0%, with college graduates getting multiple job offers.

    Under Bill Clinton, the federal budget went from $300B deficit to a $300B surplus.

    So explain to me again how Prof. Fulsome can make the assertion that no nation can tax itself to prosperity. :confused:

    .
  25. PatriotsReign

    PatriotsReign Rookie

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    But....it is now commonly accepted by both democrats and republicans that FDR's policies prolonged the depression significantly. What his programs did accomplish was to lessen the suffering of an ailing nation.

    The biggest difference between the 1930's and today's economy is that manufacturing drove the economy in the 30's vs. consumer spending driving today's economy. WWII jump started our economy big time as the engine of the military-industrial complex revved up.

    But today, any increase in taxes automatically reduces disposeable income and consumer spending. Pure logic tells us that increases in taxes can not result in economic growth.
  26. IcyPatriot

    IcyPatriot ---- JAG ----- PatsFans.com Supporter

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    #87 Jersey


    Phew ... :p my eyes thought that said Mikey's back for a camel toe. :halo:
  27. PatsWSB47

    PatsWSB47 Rookie

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    Patters, your post was completely misleading and Clinton’s economic policies were not your point of the post. You were claiming that The Bush recession was still full of steam deep into 1992 as “evidenced” by stating that our GDP growth was still dropping. Until you point out that you meant the growth rate was winding down one would have thought that the there was no growth but a reduction. The GDP actually rose in 1992. This reminds me of politicians accusing a party of cutting social programs when all they did is cut part of proposed increases in the budget. More money actually goes to the program but most people don’t know it. You seemed to have picked up a little political savvy along the way. Will you be running for some office anytime soon?:rolleyes: If anything was anemic though it was the increase in unemployment rate.

    In the end your claim of the Bush recession continuing deep into 1992 is false based on the actual criteria you presented. We had actual GDP growth and unemployment only moved up ½ of a percent over a 5 month period. That's not a booming economy by any means but it's no recession by any means either.
  28. Patters

    Patters Moderator Staff Member PatsFans.com Supporter

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    I'm perfectly happy to support the premise that Clinton's effort to balance the budget was not necessary, since the economy was already recovering. Is that the point you're trying to make? My point was merely that there are a number of ways to strengthen an economy, the most common of which is to deficit spend (Roosevelt, Reagan, Bush I, and Obama) far more than you cut taxes. But, as I said, it may be technically correct that we were no longer in a recession.
  29. mcgraw_wv

    mcgraw_wv Rookie

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    And that's what Prosperity is all about, value... Prosperity is not measured in weight, but in value.
  30. PatsWSB47

    PatsWSB47 Rookie

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    It seemed to me that you were trying to say that the economy did not begin to recover until Clinton came along.....that the Bush recession lasted well into 1992. That's the picture I thought you were painting.

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