The power of tax cuts;
Did you know that just over the past 11 quarters, dating back to the June 2003 Bush tax cuts, America has increased the size of its entire economy by 20 percent? In less than three years, the U.S. economic pie has expanded by $2.2 trillion, an output add-on that is roughly the same size as the total Chinese economy, and much larger than the total economic size of nations like India, Mexico, Ireland, and Belgium.
As he points out, you’re probably reading it here first.
More – Ed Morrissey notes some accuse Kudlow of “overplayed a winning hand”. He makes further points worth checking out.
The numbers, adjusted for inflation, are already compelling. The eleven-quarter period that Kudlow highlights ranks well in the last quarter-century. The Clinton administration had a run of such periods, starting in 1998Q1 through 2000Q3 (with each quarter showing this type of growth). Reagan had a similar run, between 1984Q3 and 1986Q3.
As King Banaian pointed out during our radio show, however, the Bush administration’s run has some remarkable differences. First, neither Clinton nor Reagan had a shooting war going on during these periods, allowing for more stable economic environments. Second, oil prices dropped during these periods for Clinton and Reagan, while they have increased considerably during the Bush expansion. Yet the Bush expansion, fuelled by the tax cuts, has shown remarkable stability and consistency. In the past eleven quarters, the only one below an annual rate of growth of 3% was 2005Q4, which reflected the economic impact of Hurricane Katrina. Also, we should recall that the Clinton era coincides with the dot-com bubble and the bulk of the investor frauds of Enron, Global Crossings, and Worldcom.
Life’s like that, Steve. Always has been, always will be.
And who ARE the ‘American Research Group’? Their website gives zero indication of their principals, backers or personnel……..their address might be telling though…’Elm Street’…quelle nightmare.
I disagree, Steve. In order to win elections, in a democracy, it is not necessary to get the support of a strict majority, it is only necessary to get the support of a plurality. In order to do that, you need to get the support of the, as you put it, “top” people. This is true even in grass-roots operations. And of course, in non-democracies, “top” is even more narrowly defined.
The GDP includes imports.
Now, can anyone tell us what has jumped by more than 100% over the last 5 years?
I remember when Paul Martin as PM, arrogantly said: ” Canadians don’t deserve a Tax break”.
Do you?
In other words these, people who are in the 99% to 98% of the highest incomes in the land. Paid mostly by you & me. Have the audacity to tell us they have more right to our money than we do. I mean what if we decided to just take there’s?
Another thing. How in heavens name do these society flakes even understand how we live. Than decide policies on there own economic experience. Thinking that how they live is the standard. Liberal lunatics.
The Persons at least forced a satrap to live as a peasant in a hut for a year. He had to grow his own food. Anyone caught helping was executed. Even they understood one has to have some empathy with those governed. Not so our lefties.
More Socialist madness. By the way leftie. Who will you steal from once all your victims have been plundered?
With no producers, just users. Where will you get production of goods with no incentive?
That would be Persians
Vitruvius:
“…the state should exercise the maximum possible restraint in pre-deciding for people what is necessary and what isn’t.”
I agree. Unfortunately, it normally seems as if the lobby group with the loudest voice/most money tends to get it’s way.
“By the way; what’s the one thing a Jaguar can’t pass on the highway? A service station! (And I like Jaguars, at least aesthetically.)”
:>D
Oops, sorry Kate, I thought Steve was back officially, and I was trying to demonstrate gracious behaviour. Then, after posting, I saw his drive-by in the “Party of Ungrownups” thread. Now I understand.
Editors note: Steve’s appearance here was in defiance of my notice that he was going to take a couple days break. He’s just made his expulsion permanent. Ignore his posts – I can and will mass delete anything he writes, should he find yet another isp to access the site from.
Should clarify:
GDP = Consumption (stuff we buy including energy products) +
Investment (includes foreign investment to service the approx $1 trillion of new US debt) +
Govt Purchases (includes close to $300B for Iraq and Afghanistan and other huge govt expenditure increases) +
Net Exports (US is actually running huge trade deficits; so my import comments affects the “Cons” side of the equation only)
Therefore, the size of the economy expanding – while it may be factually correct – does not mean much if it is largely due to increased borrowing and spending.
However, it does make for some sort of election year slogan. There is not an election in the US again, is there?
I think, Iberia, that Loudness is part of “top” (as I put it in those other comments above), but it’s a veneer. Not to be a Machiavellian or a conspiracy theorist, but I do think there is a degree to which those who are actually in a position to make things happen tend to discount the gratuitously loud.
Money is, indeed, also a part of “top”, because money is a proxy for time multiplied by market value (for some value of market, not necessarily free), multiplied by effectiveness. And there’s money in ideas too, be they philosophical, political, scientific, &c. (Since economics is about this market, I think I’m still on topic.)
There is, though, a third major factor, that being quiet, low-budget, behind the scene’s work, which is often typified by grass-roots operations. And good for them too.
So that’s why, I think, that those with the loudest voice, most money, and/or effective organization (along with other factors) tend to “get their way”, as you put it. In the vernacular, they are good at it.
> There is not an election in the US again, is there?
Yes. Every two years, the United States holds midterm, or Congressional, elections, when the members of the House of Representatives, and one third of the Senate, are elected. Every four years, it holds Presidential elections, concurrent with the Congressionals.
It has been hilarious reading what some Canadians trying to understand the American fiscal and political processes, consider “wise” advice for the same. McClellend, particularly, is a hoot.
Kate: Does he get paid to be the fool?
I realize it’s rude to answer questions directed to someone else, but if I may, based on my understanding, there is no pay involved, TauBetaPi, he is strictly amature. And thank you for noting “some” Canadians, I appreciate your acknowledgement that other Canadians do indeed understand the American fiscal and political processes, perhaps better than some Americans. After all, some of us, arguably a majority (if you discount the doom-mongers and fraud-artists), are friends of America.
Yup the market is doing great.LOL
The article is called “Cheney’s betting on bad news” and provides an account of where Cheney has socked away more than $25 million. While the figures may be estimates, the investments are not. According to Tom Blackburn of the Palm Beach Post, Cheney has invested heavily in “a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation protected securities fund. The first two hold up if interest rates rise with inflation. The third is protected against inflation.”
I guess thats why VP Chaney has dumped another (estimated) $10 to $25 million in a European bond fund which tells us that he is counting on a steadily weakening dollar. So, while working class Americans are loosing ground to inflation and rising energy costs, Darth Cheney will be enhancing his wealth in “Old Europe”. As Blackburn sagely notes, “Not all ‘bad news’ is bad for everybody.”
He doesn’t seem to have the confidence as you in the future.
informationclearinghouse.info/article13851.htmIs
Correct, Macgoo, “not all bad news is bad for everybody.” For example, there is currently a fad for people to run around warning of the risk of cholesterol. Alas, my metabolism flushes, rather than acculmulates, cholesterol, so even if the doom-mongers and fraud-artists turn out to be correct, it’s still not bad news for me.
People are like that, they’re similar, but different (ya, ya, spare me the politically correct platitudes). As John Stuart Mill said:
“Neither one person, nor any number of persons, is warranted in saying to another human creature of ripe years that he shall not do with his life for his own benefit what he chooses to do with it. All errors he is likely to commit against advice and warning are far outweighed by the evil of allowing others to constrain him to do what they deem his good.”
Let Cheney place his bets. Bulls and bears are always in disagreement. His life is not mine. Or yours.
Vitruvius, ΔΥ/DU –
I’m glad you were able to take my comment in good spirit. I hope you can see my amusement in a Dipper canadian presuming to advise others on fiscal and political policies.
I read Kate’s blog (and other canadian blogs) to try to understand the Canadian mindset. While I’ll probably never have that figured out to my satisfaction, I have to depend on my ability to make forecasts on certain realities in other parts of this planet. Canada is one of them. Until very recently, I have been steering clear of it.
Seriously: Can anyone tell me, when is the next Canadian election? What has to happen for that to occur, and why? The whole minority/majority thing you people have is very confusing. Also: why don’t you elect your Senators?
Just wondering.
Mr. Macgoo:
“According to Tom Blackburn of the Palm Beach Post, Cheney has invested heavily in “a fund that specializes in short-term municipal bonds, a tax-exempt money market fund and an inflation protected securities fund.”
Mr. Macgoo, actually if Tom Blackburn is correct, it would appear that Mr. Cheney is a conservative investor trying to protect his assets against inflation.
It is not uncommon for high net worth investors to avoid the stock market, in as much as they are more concerned about protecting their principle than about trying to make more money.
Additionally, Cheney needs to avoid appearances of conflicts of interest, and therefore holding stocks could be misconstrued. People could think he had favoritism, which is why he divested his portfolio of Halliburton and other stocks when he became Vice President.
If he really had any desire to capitalize on a downturn in the American stock market, he would simply buy puts against certain stocks, or more simply, buy mutual funds that short the American stock market. Rydex has several funds that provide this service, and anyone with a small amount of money can do well investing in them during market declines.
Bonds that he holds in Europe are simply a matter of diversification. While my portfolio is primarily in North America, I hold mutual funds that invest in Europe and the Pacific rim. This is very common investment practice, widely recommended by almost everyone in the investment markets.
So in conclusion I will simply say that everything about this hypothetical portfolio that may be Cheney’s is simply very typical of an elderly, hign net worth investor who is more concerned about protecting principle than about making gains. Frankly, it would be hard for someone with knowledge of investment markets to come to any other conclusion.
well texas c, I acknowledge the compliment.
I calls ’em like I see’s ’em.
I DO have economics training and my brother-in-law whom I would chit chat with at the time went on to acquire a phd in international trade.
economics truly is an art as well as a science. the economy is constantly in flux and there are a gazzilion variables. very unpredictable. the one truism is that ‘things’ have a natural tendency towards equilibrium in economics. one of the overriding phenomena that MUST be considered despite ideology. in 40 years of watching the beast rampage over the countryside, I have concluded the left is far too obsessed with ideology to ever warrant leadership role.
as far as my analysis on the topic at hand, NO ONE is safe.
ALL politishuns of ALL stripes are fair game.
LOL !!!
ΔΥ to ΤβΠ – do you copy, over? (Ok, ok, I’m baiting the tin-foil hats’, sorry Kate).
The next federal Canadian election is not at a fixed date. The upper limit is something like one election every five years or so, but that so rarely happens I can’t even remember the exact limit. Interestingly, Prime Minister Harper has proposed establishing fixed election dates (modulo confidence motions as described below), and there is now a debate on that matter among the citizenry.
Normally, the party holding the plurality in the House of Commons calls an election when, in their judgment, it is the best possible time between now and the limit for them to do so, for the purpose of being re-elected.
However, when there is a minority government (a plurality holding less than a strict majority), as is currently the case, and as was the case in the previous government, it is possible for the opposition parties to pool their votes to defeat the government, but only on votes for Bills (motions for pending Acts, or Statutes) that are deemed to be “Matters of Confidence”.
Acts that are budgetary, that is to say, which allocate the government’s spending plans, are deemed to be Matters of Confidence. So if a budget statute motion on the floor is defeated by a vote in the house, the government is defeated. You can see why this doesn’t happen with strict majority governments.
Interestingly, the government, especially a minority government, can itself declare a vote on a motion to be a matter of confidence, in effect “daring” the opposition to defeat the motion, and thus the government, thus forcing an election, which may less than interesting to an opposition which does not see itself in the position to fight the battle to gain seats, which is roughly the case in Canada now. Prime Minister Harper has threatened this card, but to the best of my knowledge he has not played it (at least, yet). It’s a dangerous gambit, because (believe it or not) most citizens want the government to do their job, not run around having elections to gain seats.
We don’t elect our senators for something very broadly along the lines of why, originally, the senators of the United States of America were not elected (at least, by popular vote). But I’ve already gone on too long (can you tell I held an office of Parliamentarian in an organization when I was in university, decades ago), rather than just reading my opinion, you might like to further peruse: en.wikipedia.org/wiki/Parliament_of_Canada
ΔΥ –
I thank you for the effort to type all that.
As I understand, though, isn’t there some sort of proposal for fixed dates for elections, a repesentative government, and an elected Senate?
Its like every time I’m at the Peace Arch border crossing 2 to 7 hour wait south bound and 3 to 6 minutes north bound, go figure.
Ahem. Canada’s government is a representative democracy, by all modern standards of language taxonomy, just like the United States of America. We all get to vote for a federal representative, in ridings, just like districts (if I recall correctly) in our good neighbours to the south. One adult, one vote, free and fair.
Yes, there are proposals for fixed dates for elections (I’ll resist the urge to say “fixed elections” and mention some political party I’m not in favour of), and a senate elected by popular vote, with various proposals regarding the apportionment of seats in such a senate, but broadly speaking, along provincial equality lines, rather than along simple population, much as is the case with states in the US senate. Unfortunately, there are also those who think we should abolish the senate, which I think is a big mistake.
(On the other hand, your Electoral College mechanism, which works remarkably well in your situation, won’t work in Canada, because there aren’t enough independent federal jurisdictions.)
To oversimplify, federally, we get to vote for one member of parliament, and you get to vote for (oh oh, what are the correct numbers) one or two congressmen and senators each, and in addition to that, a independent executive (well, formally, and at least in theory, Ross Perot could have won.)
Canada is a Westminster Parliamentary Democracy, which is not based on the formal rebellion of ancestral monarchic traditions that you guys went through, although we are children of the Magna Carta, just like you, and some of us want more of the concept it represents in lore, just like some of you.
It is interesting, perhaps, to note, that because of the relative lack of checks and balances in Canada, as compared to the United States of America (which is a tough comparison, because you guys score first in that, in the world), within Canada, the Canadian Prime Minister has more power than the President of the United States does within the United States. On the other hand, he has much less power on the world stage, to a large degree because there’s only 1/10th as many Canadians as there are Americans. If there were 300 million Canadians, we would play a different role.
I suspect a nontrivial number of Canadians would take great issue with me on this, but: I think that, in the family of nations, Canada is to the United States as a little sister is to a big brother. Australia and New Zealand are other siblings. India is a first cousin. Our mother is Britain, and our father is ancient Greece.
Just remember, America, don’t disrespect your little sister. For a bunch of reasons, not the least of which is that we are from the same family, and we have more long-term recoverable oil than anyone else 😉
[Not that you were, TauBetaPi.]
> Canada’s government is a representative democracy,
Ok, ok. Not what I meant at all.
> Canada is to the United States as a little sister is to a big brother. Australia and New Zealand are other siblings.
Having lived in all four of those countries you mentioned, I have to agree with your statements. I don’t understand why others get so hostile when such things get spoken of so bluntly: all countries are not equals, but surely they are all different, and very definitely, all have their own problems. I’ve recently spend most of my time exploring various options in Australia, and have only lately turned a minor amount of my attention to Canada.
> you get to vote for (oh oh, what are the correct numbers) one or two congressmen and senators each
At the Federal level, each State elects two Senators, while each State also elects a number of House Representatives based upon its population (with a minimum of one). Congressional districts are gerrymandered on a whim – something that has upset me a great deal since I learned about it in the 5th grade. The same system is typically mirrored on the State/County level, too.
I’m of mixed mind about the Electoral College. It dates back to the need for each State to cast their votes for President, when technologically it was very difficult for anyone to travel to a place of assembly. Now, with modern developments such as phonelines and internet connections, perhaps each State’s popular vote can be counted directly in the Preseidentail election.
Do you think that the government of Canada would be more responsive to needs of its citizens if it had a political system that did not depend on the situation where “… the party holding the plurality in the House of Commons calls an election when, in their judgment, it is the best possible time between now and the limit for them to do so, for the purpose of being re-elected…” ?
Doesn’t this describe a system meant to be inherently unstabile at its beginnings, and that once it succeeds entrenching itself, creates a long termed mono-power-party system? Is there some value in this that I don’t appreciate? I’m thinking of other former British possessions I’ve lived in, such as Kenya, Uganda, Nigeria. Maybe I’m missing something, but why would anyone wish for the consequent decades of empowerment for such a system of government? That simply sets the stage for widespread corruption, scandals, mismanagement of all kinds, does it not?
Thanks for your time.
Tau Beta Pi; The Westminster system evolved in England when the monarchy was still powerful enough to act as a counterweight to the power of Parliament. Canada, Australia, New Zealand et al, do not have a sitting monarch, rather they have a Governor General who sits in representation of the monarchy. The post is now largely ceremonial. Australia is exploring changes to this system as is Canada.
Nice to see voodoo economics is alive and kicking. BTW Kate, wasn’t one of the first acts of your hero Grant Devine the elimination of the gas tax? That certainly started Saskatchewan down the road to becoming a beacon of wealth and prosperity.
Do you think that the government of Canada would be more responsive to needs of its citizens if it had a political system that did not depend on the situation where “… the party holding the plurality in the House of Commons calls an election when, in their judgment, it is the best possible time between now and the limit for them to do so, for the purpose of being re-elected…” ?
I don’t know that it would be more responsive to our citizens, but it would prevent the shameless opportunism perpetrated by certain former governments, such as forcing an election when other parties are in disarray or amalgamating.
Doesn’t this describe a system meant to be inherently unstabile at its beginnings, and that once it succeeds entrenching itself, creates a long termed mono-power-party system? Is there some value in this that I don’t appreciate? I’m thinking of other former British possessions I’ve lived in, such as Kenya, Uganda, Nigeria. Maybe I’m missing something, but why would anyone wish for the consequent decades of empowerment for such a system of government? That simply sets the stage for widespread corruption, scandals, mismanagement of all kinds, does it not?
Respectively: yes; only if you’re an ostrich or a part of the mono-power-party; your guess is as good as mine; and like there’s no tomorrow. >=)
Thankfully, as was mentioned earlier, in keeping with trying to make government more accountable to our people (something that resonates incredibly strongly with the electorate due especially to the incredibly exploitative and scandalous strategies of the last federal government), our new government (as of February this year) is pushing to institute fixed election dates. However, unless I missed something, votes of non-confidence would still force the dissolution of parliament and subsequent election… Which I find to be a good thing, since in theory it should to some extent curtail election-year-only governance.
Thanks for your time.
My pleasure. Thanks for taking an interest. I’m sure any other questions or concerns you have would be happily tackled by any or many of this site’s patrons.
Mornin’ folks. I don’t think, TauBetaPi, that the matter of fixed election dates is all that important; remember, there is a five year fixed upper limit on how long a government can go without calling an election. On the one hand, there is some room for some kinds of abuse in the system. On the other hand, we don’t spend 1/3 of our lives in election campaigns (if I may caricature an effect that known election dates seems to produce in the US).
My understanding is that your electoral college has been effective in preventing both the largest states from bullying the smaller ones, and the smaller states from ganging up on the largest ones. But I realize you folks are always debating that yourselves, and many might disagree.
On the matter of how many representatives you get to vote for, I know that states each have two senators, and that congressmen are rep-by-pop, I just can’t remember whether or not each citizen gets to vote for both state senate positions, or only one.
Plus, there’s the matter of your state governments, most of which have separate executive (governor), senate, and congress representatives too, if I’m not mistaken. So you get to vote for at least a half-dozen representatives (not even counting judges, sheriffs, and dog-catchers 😉 We each get to vote for one federal member of parliament, and one provincial member of our province’s legislature.
That makes it much harder for us to split roles between parties, which you folks are traditionally quite good at, and I think that’s a shortcoming of the Westminster tradition.
vitrivus makes a number of valid point here, among them the fact that canadians use far less time in political campaigns. we’re not sure precisely when elections are to be held thus have to hold off until the official announcement.
amercuns can tell you 50 years from now when their elections are to be held, and the campaigning reflects this.
I do bemoan that after 200+ years you have devolved into a 2 party ‘tweedle-dee tweedle-dum’ selection.
shyt, theyre in a CONSTANT low level mode of ‘campaigning’. blech.
the stuff about the magna carta is correct also.
I really wish we could ELECT our senators. maybe in my lifetime. maybe I’ll run for a senate seat.
LOL !!!
went to a summer carnival on friday and challenged the ‘guess your age’ chap.
told him my facial features were not due to drink that in fact my brain cells remain intact. and that half of them are devoted to sarcasm.
LOL !!!
p.s. he got my age within ONE YEAR. very admirable.
“he got my age within ONE YEAR”……problem is….he was trying to guess your weight! 😉
A line of Mark Steyn’s, I believe quoting or paraphrasing someone else, shows the difference between the two systems as something along the lines of “whenever there’s an election in the U.S., it’s a crisis; and in Britain whenever there’s a crisis, there’s an election.”
BTW, can any other economist types out there do a critique of both Kramer and Capt. Ed and say who is more correct of the two?
P.S.
“In the wake of Enron founder Ken Lay’s death, Mark Steyn reminds us that NYT columnist Paul Krugman received $50,000 for serving on Enron’s advisory board.”
(Via Tim Blair including the link to Steyn’s original column on this.)
do a critique of both Kramer and Capt. Ed
Oops. I meant Kudlow.
Robert J BS BS: “squandered it on the war in iraq to the tune of some 10 billion a day”
Um, nice blithmetic! That’s 3.65 TRILLION a year,
or about 25% of US GDP. Fat chance.
Even the left “costofwar.com” puts the entire cost of the US War in Iraq at under $300 BILLION – and that’s since the war started, not an annual basis.
Try again.
Andycanuck wanted a critique of Larry Kudlow.
I’ve watched this guy blather on CNBC for years. He’s a high-functioning moron. He told people to hold on to their tech stocks in 2000, laughed at people who bought gold, doesn’t believe there’s a real estate bubble, doesn’t care about the US trade deficit or current account deficit, and seems to believe the US has a God-given right to direct the world economy in perpetuity.
He’s apparently unaware that the US’s current (or at least, immediately past) blessed condition was a direct result of the US mainland being untouched by WWII, while Europe and Japan had to dig out from the rubble and rebuild their entire economies. It took 4o years for Europe and Japan to catch up, but they did. Now, thanks to the internet, freer trade, and globablization, China, India, and other countries are catching up in a decade.
The US dollar is now, truly, a ‘paper tiger’. I moved $500,000 in family assets out of the US three years ago – that turned out to be a pretty good move. The US will only continue to enjoy its present pseudo-prosperity as long as the rest of the world will accept US dollars, and there are many signs that that day is drawing to a close.
BTW, lest anyone think these are my ideas alone, check out the Dow Theory Letters of Richard Russell, who’s been writing successfully about the markets for last 45 years. I’ve pretty much summarized his thinking in the above two paras, and Richard is about as capitalist as you can get.
I don’t like to find myself agreeing with Mclelland, but in this case, like a stopped watch, he’s correct for once. The US economy is pumped up on debt, and is in dangerous shape. That Kudlow can’t, or won’t, recognize or acknowledge this, shows what a fool he is.