Robert Samuelson: Will the global credit boom go bust?

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  • RedShirt USS Enterprise, UT
    Jan. 19, 2019 9:10 a.m.

    To "Tyler D" tell us how much of an economic powerhouse is Venezuela, Cuba, or Bolivia?

    When you look at GDP per capita, and look at most of Europe and compare it to the US, again, their spending as you prescribe has not given them any better fortune than the US. In fact they are worse off because of their higher tax rates.

    So again, where does anything you claim work?

  • Tyler D Prescott, AZ
    Jan. 18, 2019 3:04 p.m.

    @RedShirt – “If anything you say is true, why is it that the countries that try those things are in shambles?”

    What makes you think that? In fact, the countries that do tax/spend on those I listed are the most prosperous places on Earth. The ones that don’t (e.g., Somalia) are the ones in shambles.

    And your facts regarding the Laffer Curve are backwards – since the 1980’s we have consistently lowered taxes and cut spending on those items (and more) I mentioned.

    You’re right though – that has led to slower growth.

  • RedShirt USS Enterprise, UT
    Jan. 18, 2019 2:20 p.m.

    To "Tyler D" we are beyond the point on the Laffer curve that says more taxes slow economic growth. If you don't believe me, look at the GDP growth rate over the past 30 years. The more taxes are raised, the slower the growth.

    Now, as for paying off the debt, how do you expect to do that without budget a surplus?

    If anything you say is true, why is it that the countries that try those things are in shambles?

  • Tyler D Prescott, AZ
    Jan. 18, 2019 11:34 a.m.

    @RedShirt – “… if you increase taxes you slow economic growth.”

    Not necessarily… it depends what you do with those taxes. Here’s is a (by no means complete) list of things government could do that would actually spur growth, especially in the long run (something Wall Street could not care less about).

    1.Pay down the debt (paying interest on the debt alone is a huge economic drag).
    2.Build infrastructure – typically returns many times the benefits (over cost) to the economy.
    3.Improve education – even if you feel this should be done at the local level (I do) it is a huge net positive to the economy.
    4.R&D – government funded research has been the seed for many (most?) of our technological innovations – Google “Apple iPhone and government R&D”
    5.Boost agencies that support innovation (e.g., Patent Office – way underfunded!)

    Even transfer payments (e.g., Social Security) can spur economic growth if money is moved from low velocity sources (e.g., rich “hoarders”) to high velocity sources – the elderly who spend in the economy.

  • RedShirt USS Enterprise, UT
    Jan. 18, 2019 10:16 a.m.

    To "Kent C. DeForrest" but if you increase taxes you slow economic growth. Slowing economic growth means that the government can't meet its debt obligations. You just make things worse by increasing taxes.

    If you really want to get more growth AND take care of the debt problem there are 2 things that must be done together. You must lower taxes AND cut spending.

  • Kent C. DeForrest Provo, UT
    Jan. 18, 2019 10:00 a.m.

    "If economic growth slows, then servicing outstanding debts becomes harder."

    Unfortunately, we've developed an economic system that is dependent on endless growth. But how long can we keep turning limited resources into waste in order to fuel our insatiable appetite for growth. Some economists are looking at how to set up a sustainable economic system (something our current system isn't). We ought to stop ignoring them.

    As for the massive buildup of debt, where are those Republican deficit hawks who criticized Obama for rescuing the free-falling economy with an infusion of government spending? Yes, I know, it was all political posturing. Now they're fine with new trillions in debt, as long as the wealthy can get their tax cuts.

    When are we going to start paying for what we want from government? We need to increase taxes, not cut them.

  • Tyler D Prescott, AZ
    Jan. 17, 2019 10:23 a.m.

    Excessive debt has been a necessary, though not sufficient, cause of every financial collapse in the modern era.

    That fact alone should give us pause…