On Monday 2003-07-21 03:57, Erik Reuter wrote:On Mon, Jul 21, 2003 at 03:15:47AM -0700, Trent Shipley wrote: > The real problem with "share the wealth, trickle up" programs, besides > the fact that it might be immoral to tax the rich, is that they slow > growth.
Do you have any data to support this? Because the data I've seen shows exactly the opposite.
[Ignoring the morality issue...]
0) I will stipulate that the US economy has grown more under Democratic than Republican administrations.
However:
1) Desipte its romance with Clinton, Wall Street (or at least Wall Streeters) has (have) historically prefered Republican Presidents.
But that's because Wall Streeters benefit from Republican programs that redistribute income from poor to rich. Democrats tend to pursue positive-sum policies--policies that make the economy grow faster. Republicans tend to pursue negative-sum policies (like the recent tax cut)--policies that will slow the growth of the economy, but make the rich richer. They like Republicans because of the reverse Robin Hood aspect--not because they think that reducing their marginal tax rates will make them work harder and make the economy growth faster.
2) Highly socialist countries like Cuba have historically had much lower rates of growth than captialist counterparts. Very laizie faire capitalist economies like Hong Kong have often had stellar growth. As premiere of China Deng Xiaopeng (sp?) decided that China was is a position of sharing poverty, and had the fundemental problem of not having enough wealth to share. He liberalized the economy and it grew spectacularly. (Admittedly, this could have nothing to do with "share the wealth", and be caused entirely by planned control.)
Are you suggesting that the Democratic Party has anything to do with Castro's dictatorship?
3) Western European and Canadian economies were never command economies, but have had much higher commitments to trickle-up policies. Post-WWII US rates of growth lead European growth rates--especially if you adjust for the pseudo-growth produced by post-war reconstruction.
Simply not true up until the 1990s. Post-WWII reconstruction was essentially finished by the end of the 1950s. But European countries grew faster than America in the 1960s, 1970s, and 1980s. Only the 1990s are different.
In a broader context, the U.S., western Europe, and eastern Asia are the three most successful economies the world has ever seen. Differences between them are relatively small, and only a very rash person would argue that one had a clearly superior economic system. In the late 1980s there were lots of people who looked at the extraordinary growth of Japan's manufacturing sector and talked about Japan as number 1. In the late 1990s there were a lot of people who looked at America's high-tech boom and called for everyone to adopt the Anglo-Saxon model. And earlier, back in the late 1970s, there were still others who saw western European-style "corporatism" as superior in dealing with the inflation that was the major economic problem of that day.
4) The IMF is *always* hostile to trickle-up policies, subsidies, price controls and entitlement programs.
News to me. When the IMF staff came to me for their Article IV consultation in 1994, they were extremely worried about the inadequate funding the U.S. had in place to support Social Security and Medicare. The IMF would be (and is) extremely hostile to Bush's steel tariff and to his farm subsidy programs. It is very disappointed at the Bush administration's unconcern with free trade. But it is absolutely batshit over the idea of cutting taxes today and in the future in the face of the rapidly-approaching retirement of America's baby-boomers.
The IMF's position is a lot more nuanced than you believe...
5) Keynsian theory has fallen out of favor, being relegated to a possible response to serious recession or depression. My Econ 101 back in the late 1980s and popular reporting on economics over more than the last twenty years emphasize the importance of Hayak-Freedman neo-liberal economic policies--including low tax burdens, hence, limited opportunity for trickle-up redistributive policies.
Ummm....
The richest parts of the United States are those that have invested the most in public services--of all kinds. New York, California, Massachusetts, Pennsylvania, et cetera are all high-tax high-service states. We are certainly getting *something* out of our investments in roads, bridges, harbors, education, research and development, and so forth...
Brad DeLong _______________________________________________ http://www.mccmedia.com/mailman/listinfo/brin-l
