Jim Sinclair describes the recovery cheerleading:
It seems every day I watch mainstream media there is a discussion about the ongoing so- called “recovery.” Yesterday was no exception. I was watching an anchor on MSNBC ask a guest why the “recovery” is so uneven and why it was hard to maintain upward momentum? I yelled out to my TV, “Because there is no recovery!” The “recovery” story is talked about as fact, no matter what the facts really are.” For example, a story on housing just last week from the Wall Street Journal said, “Bank repossessions hit a record monthly high for the second month in a row, totaling 93,777–up 1% from April and 44% from last year.” (Click here for the complete story from WSJ.) Bank repos up 44% in a year! Why are “record” home repossessions not included in the “recovery”discussion? Maybe because it wouldn’t sound like a “recovery” after all?
Here is another “recovery” buster from yesterday’s Washington Post. It says the President,“. . .urged reluctant lawmakers Saturday to quickly approve nearly $50 billion in emergency aid to state and local governments, saying the money is needed to avoid “massive layoffs of teachers, police and firefighters” and to support the still-fragile economic recovery.” (Click here for the complete Post article.) “Emergency aid” sounds like a crisis and definitely not a “recovery” to me.
In the most recent report from Shadowstats.com (out last Friday), John Williams is, once again, forecasting a big dive coming in the economy. Williams says, “I would describe the shape of this recession/depression as one tracing out the path of an inept skier trying out a ski jump: sharp decline, then some leveling out with a brief up-blip, followed by a renewed plunge with the potential for an unexpectedly disastrous landing.”
Unrelated question, concerning an unasked question. David Warren writes the eternal question–
“If a government has a tax rate of zero, there will be no revenue. (I hope this is self-evident.) If it has a tax rate of 100 percent, there will also be no revenue: because there will be no private income, or at least, none willingly declared. Between those two extremes are tax rates that generate revenue. (Those who “have a problem with this” can stop reading now.)
The question is what rate will maximize it? And to that question, Laffer and any sane economist would admit a number of considerations. They may argue the comparative weight of these. But universal experience shows optimum rates are low, not high.”
My question is, should the question really be what (low) rate will maximize tax revenues? Because when we triumphantly re-discover, every generation or two, how two maximize tax revenues by taking the piano off our back, a side-effect (or is it a primary effect?)is to fund ever more government.
No one, including Reagan, has ever addressed what to do with the result of greater tax revenues other than to feed the beast.
James,
No person, other than an extreme statist, would ever set as an objective the maximization of tax revenues. That economists even think in these terms is revealing how much the profession has been corrupted by politics and government.
I realize you were not advocating such an objective.
Monty