Partisan fiscal policy
Armchairs, As the US recession looms larger and longer, Bush and his folk are found in the uneasy position of trying some active fiscal policies... In a very simplistic macro view, raising public expenditures or lowering taxes (in the short run) were both considered "expansionist" fiscal policies--at least in the sense that both increase public sector deficits... they are equivalent policies. However, in real world policymaking, republicans prefer lower taxes and democrats would rather have more expenditures... as if they were different policies. Does this partisan/ideological asymmetry have any real effect? Is the equivalence for real... in the short run... in the long run? Do people perceive them as different too? More practically, what is easier to get, lower taxes or higher expenditures? Does this apply to the federal as well to the state level? any reactions? -JA
Re: Partisan fiscal policy
--- [EMAIL PROTECTED] wrote: In a very simplistic macro view, raising public expenditures or lowering taxes (in the short run) were both considered expansionist fiscal policies--at least in the sense that both increase public sector deficits... they are equivalent policies. The expansionist effect is reduced when the deficit is financed from domestic borrowing, which displaces private domestic consumption or investment. However, in real world policymaking, republicans prefer lower taxes and democrats would rather have more expenditures... as if they were different policies. Does this partisan/ideological asymmetry have any real effect? As such, no. But there are also supply-side effects from reducing taxes, which would provide a larger effect, and the long-run domestic effect depends on what the funds are spent for, i.e. military abroad versus domestic consumption or governmental investment. More practically, what is easier to get, lower taxes or higher expenditures? Higher expenditures are easier, since tax cuts require lengthy deliberations and are more difficult to reverse. Spending can be focused on local pork. Does this apply to the federal as well to the state level? I don't see why not. Fred Foldvary = [EMAIL PROTECTED]
Re: Environmental and economic effects of Speed Limits
Hey, I know this may be a little late, but you might try the traffic forum: www.trafficforum.de . I can't make any promises, but it might be useful. At least the java applets on the links page are fun to play with Best regards, jsh __ Do You Yahoo!? HotJobs - Search Thousands of New Jobs http://www.hotjobs.com
Re: Partisan fiscal policy
In a message dated 8/20/02 7:58:33 AM, [EMAIL PROTECTED] writes: --- [EMAIL PROTECTED] wrote: In a very simplistic macro view, raising public expenditures or lowering taxes (in the short run) were both considered expansionist fiscal policies--at least in the sense that both increase public sector deficits... they are equivalent policies. The expansionist effect is reduced when the deficit is financed from domestic borrowing, which displaces private domestic consumption or investment. Agreed. And if financed by creating new money, it simply increases nominal aggregate demand, but not real aggregate demand (does anyone in econ still talk about the old concept of aggregate supply and demand?), creating a false expansion--inflation--followed by a bust. That policy characterizes the stagflation circa 1968-1982. However, in real world policymaking, republicans prefer lower taxes and democrats would rather have more expenditures... as if they were different policies. Does this partisan/ideological asymmetry have any real effect? As such, no. But there are also supply-side effects from reducing taxes, which would provide a larger effect, and the long-run domestic effect depends on what the funds are spent for, i.e. military abroad versus domestic consumption or governmental investment. If the tax reduction comes in the form of reducing marginal tax rates we'd get a supply-side increase in the rate of growth, but tax rebates a la Ford or Junior Bush simply shift the income back to the private section (where it may increase growth simply through an efficiency effect, which you'd also get with cuts in marginal tax rates). More practically, what is easier to get, lower taxes or higher expenditures? Higher expenditures are easier, since tax cuts require lengthy deliberations and are more difficult to reverse. Spending can be focused on local pork. Likewise targeted tax credits and other narrowly-focuses tax breaks. It's much hard to do what Reagan did--making sweeping across-the-board cuts in marginal individual income tax rates. Does this apply to the federal as well to the state level? I don't see why not. Fred Foldvary Agreed. David Levenstam
Re: Environmental and economic effects of Speed Limits
Eric Crampton wrote: They offer a program encouraging people to fight traffic tickets. Members who challenge their speeding tickets in court and lose are compensated for the cost of their ticket by the Association. While one might expect adverse selection to bankrupt the organization (or to make them change their policy), it's still going strong I suppose they don't pay the higher insurance premiums - probably 80-90% of the full amount you pay for a traffic offense. -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: Environmental and economic effects of Speed Limits
On Tue, 20 Aug 2002, Bryan Caplan wrote: I suppose they don't pay the higher insurance premiums - probably 80-90% of the full amount you pay for a traffic offense. They offer 2 policies: under the first one (cheaper) they pay your ticket if you lose. You pay the fine and submit the receipt; they reimburse. Under the Premium option, they will provide you with a grant of the amount of the ticket the second it is issued, then will pay the ticket if you fight in court and lose. The grant is intended for use in developing one's defense, etc. The premium option is $120/yr, and has no maximum number of tickets that will be eligible for the grant. Sure, most of the cost of the ticket is in the insurance premium, but should still expect adverse selection problems. On the other hand, benefits are only payable if you have a valid driver's licence when you get your ticket; presumably, folks who would run the system into larger losses lose their licences before they can impose too severe a burden -- Prof. Bryan Caplan Department of Economics George Mason University http://www.bcaplan.com [EMAIL PROTECTED] He wrote a letter, but did not post it because he felt that no one would have understood what he wanted to say, and besides it was not necessary that anyone but himself should understand it. Leo Tolstoy, *The Cossacks*
Re: cultural cues and queues
[EMAIL PROTECTED] writes: As a libertarian purist, with a particular bug in my ear about immigration, . . . [EMAIL PROTECTED] wrote: Is that a pro-immigration bug (libertarian supporting open borders?) Er, yes. I have heard some libertarian arguments for influx control but found them strained at best. The `particular bug' is there partly because I was born overseas (to American parents), never lived four years in one place before age 12, and so do not consider myself from any specific place. (The Fourteenth Amendment citizenship clause does not apply to me, and I've never been able to determine whether I am a citizen of any State!) Also I worked for an immigration lawyer, and saw how arbitrary the rules can be - so I'm not moved by the common line We welcome immigrants who demonstrate willingness to jump through silly hoops, but not those who defy The Law out of a selfish desire to escape oppression, get a better job, or raise their children in a safer environment. -- Anton Sherwood, http://www.ogre.nu/
