tag:blogger.com,1999:blog-2098432983500045934.post1358230928867997786..comments2024-03-12T22:19:32.339-04:00Comments on The New Arthurian Economics: EvolutionThe Arthurianhttp://www.blogger.com/profile/16501331051089400601noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-2098432983500045934.post-62960853444036347682011-06-24T12:06:29.556-04:002011-06-24T12:06:29.556-04:00I'm pressed for time and only skimmed this pos...I'm pressed for time and only skimmed this post, but this jumped out at me.<br /><br /><i>So now the concept has evolved into raising tax rates to make the economy grow. The cause-and-effect relation is in full bloom. But it is wrong, just so wrong. And again,<b> it is based on the flawed premise that balancing the federal budget will fix the economy.</b></i><br /><br />There is a huge point you are missing.<br /><br />The part I dissent with is bolded above. I don't know what your cited authors' reasonings might be, but I will tell you that raising taxes on the wealthy has other effects that seem not to be on your radar screen, but are dead center in mine.<br /><br />Excessive wealth in the hands of a few is not only politically unstable (or feudal, and off-topic) it leads to asset misallocation. This has become grotesque.<br /><br />1) We have seen this in serial bubbles over the last decade plus (20's redux.) We see it in a derivatives market valued at a big multiple of total world GDP. <br /><br />Instead of genuine investment in physical plant, technology, and education, we have psuedo-investment in rent seeking and financial tail chasing. This, in a nut shell, is the Great Stagnation.<br /><br />2) Government uses money differently - specifically as transfer payments to those who have little, and will SPEND it, and on works projects which employ people, who can then SPEND. A capitalist economy depends on spending, and it seems that only the Keynesians will face that obvious fact.<br /><br />3) Taking money from the rich reduces their power and influence. Their influence is greed-directed, not society directed. Trickle down does not work. Taxation does.<br /><br />4) Excessive wealth has led to corporatism, where transnational mega-corporations have enormous economic and political power. Corporatism is the natural resultant of capitalism, and to prevent it we need both robust regulations and a steeply progressive tax code. Government is the only entity with the size and power to combat corporatism. Corporatists have taken over government for the same reason they indulge in mergers and acquisitions - to eliminate the competition. <br /><br />As an aside, Excessive concentrated wealth leads to an aristocracy, which is counter to the priciples on which this country was founded. Adios America. It was nice while it lasted.<br /><br />Taxation and regulation are the answers to every bit of this, and they are the reasons why we had a golden age. Their lack is destroying the economy and the nation. It is that simple and straight-forward.<br /><br />If this sounds Marxist, then so be it. <br /><br />WASF!<br />JzBJazzbumpahttps://www.blogger.com/profile/07337490817307473659noreply@blogger.com