Taxes and the Economy (or Das Control System)

CSGnet Archive CSG2008
1

[From Rick Marken (2008.07.30.2110)]

My next thread is related to what I believe was an earlier call for
something like a grassroots movement to use PCT to make the world a
better place. While watching the US presidential campaigns I realized
that one of the things that is making the world -- at least the world
of the US -- a worse place is the continuous parroting, by Republicans
but never rebutted by the Democrats, of the idea that "increased taxes
are bad for the economy". Of course, this is the only economic idea
the Republicans have: when the economy is doing well they want to
lower taxes because they are not needed and when the economy is doing
poorly they want to lower taxes because they are the reason why the
economy is doing poorly.

The idea that taxes are bad for the economy must be based on a theory
of how the economy works. It can't be based on data because the data I
have seen (and analyzed myself) shows that, if anything, increased
taxes are good for the economy (in terms of growth rate, budget
balance and strength of currency). The theory that taxes are bad
seems to be based on an open loop model of the economy that views
production as "driving" the economy, in terms of wealth and job
creation. Increasing taxes (particularly on capital gains) is
supposed to reduce investment and, thus, reduce economic growth. But I
(and others, in "real" economic articles) have shown that, at the
macro level, growth (measured as change in GDP per unit time) actually
precedes investment. These empirical results make sense in terms of a
closed loop macro model of the economy. Increased taxes (when taxation
is progressive, as it is in the US, though less so than it used to be)
redistributes income to that there is more people, in the role of
consumers, can control for what they produce, in the role of
producers.

The "taxes are bad' mythology has produced a dreadful economic
situation in the US (or so I hear; if you're in the top 5%, as I
apparently am, to my chagrin, things are just fine). PCT, I think,
could help people see that the economy -- with a free but sensibly
regulated market -- is a closed-loop system that involves the
collective control of input (goods and services). This collective
control process works best when individuals cooperate rather than
trying to "win" the wealth game. And one way to cooperate is to tithe
a fair proportion of one's wealth to investment in the infrastucture
-- education, healthcare, transportation, energy -- that benefits
_all_ producers.

Best

Karl Marken

···

--
Richard S. Marken PhD
rsmarken@gmail.com

2

[From Dick Robertson,2008.08.01.1140CDT]

Nicely put. It sure makes sense. When poor people have no money they can’t buy the stuff that the factory and business owners want to sell. And has anybody looked into what the upper 1% really did with the Bush tax cuts:? If I had been included, common sense would have told me that buying real estate would be a much safer venture than starting a new business with all its risks and uncertainties. If a lot of the top 1% felt that way, could that have just contributed to the excessive run up in the price of real estate?

Just wondering

Best,

Dick R

···

----- Original Message -----
From: Richard Marken rsmarken@GMAIL.COM
Date: Wednesday, July 30, 2008 11:12 pm
Subject: Taxes and the Economy (or Das Control System)
To: CSGNET@LISTSERV.ILLINOIS.EDU

[From Rick Marken (2008.07.30.2110)]

My next thread is related to what I believe was an earlier call for
something like a grassroots movement to use PCT to make the
world a
better place. While watching the US presidential campaigns I realized
that one of the things that is making the world – at least the world
of the US – a worse place is the continuous parroting, by Republicans
but never rebutted by the Democrats, of the idea that “increased taxes
are bad for the economy”. Of course, this is the only
economic idea
the Republicans have: when the economy is doing well they want to
lower taxes because they are not needed and when the economy is doing
poorly they want to lower taxes because they are the reason why the
economy is doing poorly.

The idea that taxes are bad for the economy must be based on a theory
of how the economy works. It can’t be based on data because the
data I
have seen (and analyzed myself) shows that, if anything, increased
taxes are good for the economy (in terms of growth rate, budget
balance and strength of currency). The theory that taxes
are bad
seems to be based on an open loop model of the economy that views
production as “driving” the economy, in terms of wealth and job
creation. Increasing taxes (particularly on capital gains) is
supposed to reduce investment and, thus, reduce economic growth.
But I
(and others, in “real” economic articles) have shown that, at the
macro level, growth (measured as change in GDP per unit time) actually
precedes investment. These empirical results make sense in
terms of a
closed loop macro model of the economy. Increased taxes (when taxation
is progressive, as it is in the US, though less so than it used
to be)
redistributes income to that there is more people, in the role of
consumers, can control for what they produce, in the role of
producers.

The "taxes are bad’ mythology has produced a dreadful economic
situation in the US (or so I hear; if you’re in the top 5%, as I
apparently am, to my chagrin, things are just fine). PCT,
I think,
could help people see that the economy – with a free but sensibly
regulated market – is a closed-loop system that involves the
collective control of input (goods and services). This
collectivecontrol process works best when individuals cooperate
rather than
trying to “win” the wealth game. And one way to cooperate
is to tithe
a fair proportion of one’s wealth to investment in the infrastucture
– education, healthcare, transportation, energy – that benefits
all producers.

Best

Karl Marken

Richard S. Marken PhD
rsmarken@gmail.com

3

[Martin Taylor 2008.08.01.13.22]

[From Rick Marken (2008.07.30.2110)]

My next thread is related to what I believe was an earlier call for
something like a grassroots movement to use PCT to make the world a
better place. While watching the US presidential campaigns I realized
that one of the things that is making the world -- at least the world
of the US -- a worse place is the continuous parroting, by Republicans
but never rebutted by the Democrats, of the idea that "increased taxes
are bad for the economy".

Although I completely agree with you on the benefits of paying more taxes, I'm afraid I don't see an obvious way that PCT can help change this aspect of the world. The problem seems more related to the System Dynamics group, even though the individuals buying and selling are control systems.

You want enough people to see that paying more taxes will (counterintuitively) leave them more to spend in the long run even though it leaves them less in the short run. Feedback through large networks with delays measured in years is hard for anyone to keep straight, let alone the average voter. But only if enough people understand it will there be political pressure to raise taxes to a level that can sustain a reasonable level of prosperity. How could you use PCT in this effort? People don't seem to react well to data and examples, such as the greater well-being, happiness, and contentment (3 different properties) in high-tax Scandinavia than in tax-cutting countries. It's called "socialist" or "statist", and therefore bad without further discussion. That people feel better and have more money to spend on their personal whims by spending less on necessities like education and health care is irrelevant, as is the idea that poor people can have good health care. It's simply BAD. How can knowing PCT help to change that kind of attitude?

Alternatively, how would you use PCT to argue the case on a theoretical level that would be persusasive to the average voter? I think it would be pretty hard to convince even some of the regular contributors to CSGnet, people who are very familiar with PCT :slight_smile:

Martin
(I hope to get back to contributing regularly at some point, but it won't be soon)

4

[From Rick Marken (2008.08.01.1800)]

Martin Taylor (2008.08.01.13.22)--

You want enough people to see that paying more taxes will
(counterintuitively) leave them more to spend in the long run even though it
leaves them less in the short run.

Close enough.

Feedback through large networks with
delays measured in years is hard for anyone to keep straight, let alone the
average voter.

I think the delay in the macro economic feedback loops are often on
the order of months, at most. The benefits of the Clinton tax increase
showed up almost instantly; the woes created by Bush's tax decrease
(in terms of an increase in the deficit) was seen in weeks.

People don't seem
to react well to data and examples, such as the greater well-being,
happiness, and contentment (3 different properties) in high-tax Scandinavia
than in tax-cutting countries.

This is the problem, I think. My mother, for example, simply dismisses
economic reports if they are bad, especially when her beloved
Republicans are in charge. If she has no problem then no one does and
anyone who says they do is just a whiny liberal. I love my Mom but not
always her behavior;-) Like Piaget's egocentric children, who imagine,
at around 2 or 3, that everyone is seeing what they see, I think
conservatives think that everyone is as happy as they are; social
egocentrism?

How can knowing PCT help to change that kind of attitude?

I don't think it can. I just think that if we are going to follow
Bill's advice and try to do something important for the world,
fighting against economic myths -- that hurt people -- seems like a
good way to go. Working to elect tax and spend liberals would do a lot
more to improve the general ability of all people to control -- and a
lot more quickly -- than almost anything we could do as PCTers, I
think. Tax and spend works because an economy is the collective
control of perceptions.

Alternatively, how would you use PCT to argue the case on a theoretical
level that would be persusasive to the average voter? I think it would be
pretty hard to convince even some of the regular contributors to CSGnet,
people who are very familiar with PCT :slight_smile:

Tell me about it;-) But read my article on the economy at
www.mindreadings.com/HMod.pdf and see how I think PCT can help people
re-conceptualize the nature of an economy.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com

5

From Jim Wuwert 2008.08.02.1447

[From Rick Marken (2008.08.01.1800)]

I think the delay in the macro economic feedback loops are often on
the order of months, at most. The benefits of the Clinton tax increase
showed up almost instantly; the woes created by Bush’s tax decrease
(in terms of an increase in the deficit) was seen in weeks.

In regards to the Bush tax decrease, could this have been because spending was not cut along with the tax decrease?

This is the problem, I think. My mother, for example, simply dismisses
economic reports if they are bad, especially when her beloved
Republicans are in charge. If she has no problem then no one does and
anyone who says they do is just a whiny liberal. I love my Mom but not
always her behavior;-) Like Piaget’s egocentric children, who imagine,
at around 2 or 3, that everyone is seeing what they see, I thinkconservatives think that everyone is as happy as they are; social
egocentrism?

Are you sure that all conservatives are egocentric? Or do we disagree with liberals on how to help those that need help? Is the government the best option?

I don’t think it can. I just think that if we are going to follow
Bill’s advice and try to do something important for the world,
fighting against economic myths – that hurt people – seems like a
good way to go. Working to elect tax and spend liberals would do a lot
more to improve the general ability of all people to control – and a
lot more quickly – than almost anything we could do as PCTers, I
think. Tax and spend works because an economy is the collective
control of perceptions.

Why do you think the government is best to redistribute wealth versus an individual? Who keeps the government honest? How do you know they will redistribute the money appropriately?

By the way, I think this is a great thread started by you.

All e-mail correspondence to and from this address
is subject to the North Carolina Public Records Law,
which may result in monitoring and disclosure to
third parties, including law enforcement.
AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER

6

[From Rick Marken (2008.08.03.1100)]

From Jim Wuwert (2008.08.02.1447)--

In regards to the Bush tax decrease, could this have been because spending
was not cut along with the tax decrease?

Of course. But Republicans never cut spending to compensate for tax
cuts. If they did they would have a real recession (of Hooverian
proportions) on their hands. Ronnie Raygun pulled out of the 1982
recession by increasing government spending big time after his useless
tax cut (useles to everyone but his wealthy friends). He spent on the
military rather than on anything useful but it doesn't really matter;
redistribution of wealth creates jobs and growth. But if you spend and
cut taxes at the same time you have to borrow to make up for it; hence
the huge Raygun and Bush deficits.

The Republicans (whether they are really "conservative" or not is
beside the point) believe that cutting taxes in itself is always good
for the economy. My point was simply that this is not true. Even if
the Republicans didn't cut taxes until budget cuts were in place
(which seem like the sensible thing to do; reduce expenses before
reducing revenue) I argue that there is no evidence that these tax
cuts help the economy.

Taxes should be thought of as revenue that is used for capital
investments in the community -- investments that benefit _all_
producers (and, therefore, nearly all citizens since both workers and
managers are producers). As I said, government investment of tax
revenue in education, transportation, health care, and, yes, common
defense, benefits all producers and, thus, all citizens.

Are you sure that all conservatives are egocentric?

I don't know about "conservative" but Republicans -- at least those in
power -- seem to be quite egocentric in the sense I said; they don't
look at the data or, if they do, they don't accept it. The data shows
clearly that raising taxes does not hinder economic growth and
lowering taxes doesn't help it. Lowering taxes is also supposed to
create jobs; the data show that the slowest job creation has been in
the "low tax" administrations. Since Eisenhower employment growth was
worst for the current Bush administration and second worst for the
first Bush (fifth worst for Raygun); indeed, of the 10 administrations
since Eisenhower, the top four in job creation have been the "tax and
spend" Democratic adminstrations; the bottom six are all Republican.
That's the facts. It doesn't make sense in the context of a S_R model
of the economy but it does make sense in the context of a closed loop,
PCT view of the economy.

Or do we disagree with liberals on how to help those that need help?

That's true too.

Is the government the best option?

You bet!

Why do you think the government is best to redistribute wealth versus an
individual?

Because it's an organization that represents (at least in theory) the
interests of the individuals who elect them to institute policies in
order to (among other things) "promote the general welfare".

Who keeps the government honest?

Auditors and other people (including the electorate) to whom the
government is presumably accountable. It's called constitutional
democracy, I believe. It's not perfect but it works a lot better than
dictatorship or anarchy. I like it!

Who keeps the individuals that you think should be doing the helping honest?

How do you know they will redistribute the money appropriately?

I don't. The best you can do is try to keep your eye on things and be
politically attuned. The redistribution is never going to please
everyone but that's what politics is about.

By the way, I think this is a great thread started by you.

Thanks. Now get out there and work toward throwing Republicans out of
office as fast as possible!

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com

7

From Jim Wuwert 2008.08.03.1844

[From Rick Marken (2008.08.03.1100)]

Taxes should be thought of as revenue that is used for capital
investments in the community – investments that benefit all
producers (and, therefore, nearly all citizens since both workers and
managers are producers). As I said, government investment of tax
revenue in education, transportation, health care, and, yes, common
defense, benefits all producers and, thus, all citizens.

Why is the government regulating education and health care? Don’t you think local boards of education can do a better job of regulation than some bureaucrat in Washington D.C.? The government in North Carolina has capped Charter Schools which are essentially mini-school districts. Don’t you think your doctor can do a better job of managing your health than the government bureaucrat? The doctor has spent more time studying your health and knows you better than anyone. Why are we punishing these two groups with federal regulation?

Who keeps the individuals that you think should be doing the helping honest?

I like the idea of certification boards (not licensing boards) keeping professionals honest. Doctors and teachers can get nationally certified as well as other professionals. I think they keep individuals honest and when people are dishonest they bring swift justice. It also allows the profession to creatively address problems of the patient/student. It gives them freedom to do their job without fear of being sued and having to fill out some pointless government document that has no purpose. Could you explain the purpose of half of the paperwork doctors and teachers have to fill out? Most of it is pointless and gets in the way of truly helping people.

How do you know they will redistribute the money appropriately?

I don’t. The best you can do is try to keep your eye on things and be
politically attuned. The redistribution is never going to please
everyone but that’s what politics is about.

I don’t think government is capable of anything beyond protecting us and minor regulation of people when it interferes with the life, liberty and pursuit of happiness. Let the individuals redistribute the money. You would see a rise in non-profits that would seek to find cures for diseases and meet the needs of the intercity children. Non-profits would do it way better than the government. They would produce better results because if they didn’t, funding would decrease right away and money given to one that really did produce. Imagine someone setting up a private school for intercity (kids from poverty) and the children could go to school for free and truly learn how to break the cycle of poverty. A group of individuals would do a better job of accomplishing that than the government. I think you would see the rise of these non-profits if the government would back off. Government would need to be involved on a very small scale.

By the way, I think this is a great thread started by you.

Thanks. Now get out there and work toward throwing Republicans out of
office as fast as possible!

I find myself disagreeing with some of the approaches of Republicans because they seem to be pandering rather than standing up for what is right. I think we should be throwing out the democrats because they are the ones in control of Congress right now. It can’t be entirely the Republicans fault because it is a democratically controlled Congress. Perhaps if the democrats want change, they need to look within what they can control. They have quite a bit of power and control right now. What have they done the last two years? I think all of them (Repubs and Dems) are only out to serve themselves and their “political careers”-whatever that is.

Best

Rick

Richard S. Marken PhD
rsmarken@gmail.com

All e-mail correspondence to and from this address
is subject to the North Carolina Public Records Law,
which may result in monitoring and disclosure to
third parties, including law enforcement.
AN EQUAL OPPORTUNITY/AFFIRMATIVE ACTION EMPLOYER

8

[From Rick Marken (2008.08.03.1820)]

Jim Wuwert (2008.08.03.1844)

Why is the government regulating education and health care? Don't you think
local boards of education can do a better job of regulation than some
bureaucrat in Washington D.C.?

Sometimes local bureaucrats do better; sometimes DC bureaucrats do
better. Look at how badly local school boards did on the "teaching
evolution" thing in Kansas. But, anyway, that wasn't the point. The
point was that education should be publicly funded -- through taxes --
because education is an investment that benefits the community.

Don't you think
your doctor can do a better job of managing your health than the government
bureaucrat?

Sometimes yes, sometimes no. But, again, that's not the point. The
point is that funding for healthcare should come from taxes.

Why are we punishing these two groups with federal regulation?

Regulation is not the same as funding. I think regulation is also
important but I know that some regulations can be "punishing". But
that is kind of orthogonal to the issue of funding. It is difficult
to develop regulations that accomplish their goals without punishing
the innocent. I know. I own real estate and I have to deal with some
very annoying regulations that are aimed at protecting public safety
but often end up preventing me from doing things that are perfectly
safe but, nevertheless, would violate the codes. But I'd rather have
the inconvenience of the codes than live in a community where the
housing is shoddy.

>Who keeps the individuals that you think should be doing the helping honest?

I like the idea of certification boards (not licensing boards) keeping
professionals honest.

Me too. These boards are typically government (or government
sanctioned) entities. So you are for government regulation after all.
Good for you!

Could you explain the
purpose of half of the paperwork doctors and teachers have to fill out? Most
of it is pointless and gets in the way of truly helping people.

I agree that there is a lot of unnecessary paperwork. I'm not familiar
with the problem for teachers (my son teaches high school and has
never complained about it) but I think the problems for physicians,
particularly those in private practice, is caused by all the different
insurance providers with which they have to deal. So it's really the
lack of of a single payer (government) insurance system that creates
the paperwork problem for physicians, not the existence of government
regulations.

I don't think government is capable of anything beyond protecting us and
minor regulation of people when it interferes with the life, liberty and
pursuit of happiness. Let the individuals redistribute the money.

Since Raygun government policy has moved more and more toward leaving
redistribution to individuals rather than government. During that time
the maldistribution of wealth in this country has continued to
increase to pre-1929 levels. The data show that the government is much
more effective at redistribution than individuals.

You would
see a rise in non-profits that would seek to find cures for diseases and
meet the needs of the intercity children. Non-profits would do it way better
than the government. They would produce better results because if they
didn't, funding would decrease right away and money given to one that really
did produce. Imagine someone setting up a private school for intercity (kids
from poverty) and the children could go to school for free and truly learn
how to break the cycle of poverty. A group of individuals would do a better
job of accomplishing that than the government. I think you would see the
rise of these non-profits if the government would back off. Government would
need to be involved on a very small scale.

This is all theory. If it were right, then things would be getting
better because there has been a continual move away from government to
private funding since 1980. But the ffact is that the US has been
moving backwards in many areas of innovation (least perhaps, in
military related innovations) since government support for research
started to decline in the early 1980s.

I find myself disagreeing with some of the approaches of Republicans because
they seem to be pandering rather than standing up for what is right. I think
we should be throwing out the democrats because they are the ones in control
of Congress right now.

The Republicans have controlled congress since 1984 and all branches
of government since 2000. During that time wealth disparity has
increased to obscene levels, healthcare in the US is a catastrophe (we
pay the most for the worst outcomes of any industrialized country),
our education (except for some advanced programs) is in the toilet and
we are in debt up to our ears. The Democrats have been in control of
congress for less than 2 years. They actually don't control congress
since they don't have a filibuster proof majority in the Senate. And
they are working against a Presidential veto even if they can get
stuff through. Anyone who would vote for a Republican for _anything_
must like the way things have been going over the last 7 years.

It can't be entirely the Republicans fault because it
is a democratically controlled Congress.

See above. And "it" didn't just start in December 2006 (when the Dems
became a majority). If the Republicans remain in control of the
government (and I think that's a distinct possibility given what I
have seen of the US voting public) I think there will be an economic
-- and perhaps a nuclear -- disaster of unprecedented proportions. But
people -- even Republicans -- are control systems so it's possible
that even a Republican controlled government will do the right thing
(raise taxes, cut military spending, institute a national health
insurance program, stop unilateral support for oppressive regimes,
etc) when push comes to shove. But is it worth the risk?

Perhaps if the democrats want
change, they need to look within what they can control. They have quite a
bit of power and control right now. What have they done the last two
years?

They're managed to do some little things but they couldn't can't turn
the ship of state on a dime when Captain Queig (the Republicans) is
holding down the other side of the tiller.

I think all of them (Repubs and Dems) are only out to serve
themselves and their "political careers"-whatever that is.

I'm not that cynical. My own congressman (Waxman) is a great guy. And
there are some very capable and good people up there. I was just in
Philly and was moved to see where the founders hammered out a plan for
a government of the people that would work for the good of all people
(of course, at that time women and blacks weren't included in "people"
but things have gotten better). So things do get better but we have to
work to make it so. Yes, there are selfish people in politics. But
there are some good ones too. They are the ones who believe in
government and bring us things that materially improve the quality of
life in the US. Business people have made things better too; but they
do best when they operate in the framework of a good government. Look
how much better businesses do (in terms of stock market value, say)
when a tax and spend liberal is in the White House rather than a
borrow and spend (or, worse, a don't borrow, don't spend)
conservative. Just look at the data!!

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com

9

[From Bjorn Simonsen (2008.08.11, 09:45 EUST)]

[From Rick Marken (2008.07.30.2110)]

I have tried to send mails to the CSG groupnfor a whole week and not succeded. This time I looked at Rick'soing up a level" and used the "answer" technique.

I receive mails from CSGNET OK.

I send mails to myself OK.

What is the matter?

a worse place is the continuous parroting, by Republicans
but never rebutted by the Democrats, of the idea that "increased taxes
are bad for the economy". Of course, this is the only economic idea
the Republicans have: when the economy is doing well they want to
lower taxes because they are not needed and when the economy is doing
poorly they want to lower taxes because they are the reason why the
economy is doing poorly.

I think you must specify what you are talking about. Is it Microeconomy or Macroeconomy? I think you are talking about microeconomy, about producers prooducing goods for storing at stores and at the same time sell some of the the goods. I think you also think upon consumers buying the goods. If the consumers buy goods (economy is doing well), the stoes are reduced and the producer choose to increase the prices and start producing more goods. If the consumers don't buy (the economy is doing poorly) , the producer stop producing more for the stores and mabe somebody looses what is invested. Taxes are paid at the microeconomic level. The taxes are used to pay the things the government wish to buy from producers. This is happening in Macroeconomy.

My suspicion is that all political partys uses the taxes to pay what is specially good for their members. The way I know Republicans and Democrats are that Democrats wishes more taxes to help people that doesn't help themselves and Republicans wish to help themselves. To do that they need money (lower taxes).

The way I think PCT is able to explaines this is by HPCT. Some people control the Republican System Concept and other people control the Democratic Systerm Concept. They have different Principles et cetera. I don't think the one System Concept is bether than the other. And I think we shall respect all peoples System Concepts et cetrera, or bether, respect all people. The way to find a solution on this extern conflict (sometimes intern conflict), is put in a 12. level in HPCT. This should be the "Respecting level", I don't find a bether word and need help. This level may help other people searching for a religious 12. level. For me the "Respecting level" is the level of "Love", the most central theme in all Religions, I think.

The idea that taxes are bad for the economy must be based on a theory
of how the economy works. It can't be based on data because the data I
have seen (and analyzed myself) shows that, if anything, increased
taxes are good for the economy (in terms of growth rate, budget
balance and strength of currency).

I know you have studiet this Macroeconomic theme. But it is too handy to say that increased taxes are good for the economy. It depends how the taxes are used, what is payed. You know that when the Government gollects money in fonds, they are often not good for the economy. When Norway give money to poor underdeveloped contries, it is not good for our economy. If the Government buy Scools or Hospitals it is good for the economy. If they dont pay for prvative maintenance it is not good for the economy (Democratic).

Let me at the same time say that when private people because of lower taxes or other reasons put their money under the mattress it is not good for the economy (Republican)

The theory that taxes are bad
seems to be based on an open loop model of the economy that views
production as "driving" the economy, in terms of wealth and job
creation. Increasing taxes (particulay on capital gains) is
supposed to reduce investment and, thus, reduce economic growth.

I don't see the open loop. I see a top level they are controlling.

This collective
control process works best when individuals cooperate rather than
trying to "win" the wealth game.

I absolutely agree.

And one way to cooperate is to tithe
a fair proportion of one's wealth to investment in the infrastucture
-- education, healthcare, transportation, energy -- that benefits
_all_ producers.

I am not sure I agree. I think the way to cooperate is to agree, not for anybody to say that this is a fair proportion.

bjorn

10

[From Bjorn Simonsen (2008.08.11, 10:35 EUST]

from Dick Robertson,2008.08.01.1140CDT

And has anybody looked into what the upper 1% really did with the Bush tax cuts:? If I had been included, common sense would have told me >that buying real estate would be a much safer venture than starting a new business with all its risks and uncertainties. If a lot of the top 1% felt >that way, could that have just contributed to the excessive run up in the price of real estate?

Just wondering

I think many people run their own business and a lot of them have hired people to work for them. If the taxes are high, money they could use to produce more, employ an other employee, is more difficult if you self administered the taxes/money. If you employ another employee, the government would get more taxes, and they didn't need to spend money to "poor people".

This is two games. In the one the government call for taxes and use them to poor people who buys goods. In the other game the private person who employ an other employee pays him more money, the government get taxes and the person use the money to buy goods. The producer get his wage bill met and he is able to pay wage bill next year.

What game will you play?

People plays different games because of their HPCT. One of my jobs in this life is to respect all the games they play.

bjorn

11

[From Rick Marken (2008.08.12.0840)]

Bjorn Simonsen (2008.08.11, 09:45 EUST)

Me:
a worse place is the continuous parroting, by Republicans
but never rebutted by the Democrats, of the idea that "increased taxes
are bad for the economy".

I think you must specify what you are talking about. Is it Microeconomy or
Macroeconomy?

I was referring to the Macro Economy because that's the data to which
I was referring. The data (which is the observed relationship between
government and/or private investment and growth as well as growth rate
during low tax and high tax administrations) show that increases in
taxtes have either no effect on growth or, if anything, a slightly
positive effect. I'm sure this depends on the tax rate being
reasonably progressive, as it still is even in the US, though far less
progressive than in countries like yours.

The way I think PCT is able to explaines this is by HPCT.

I think PCT explains it (at the macro level) as the collective control
of perception, as per my H. economicus model. Progressive taxation
reduces leakage, which is purchasing power that the aggregate producer
does not return to itself.

I know you have studiet this Macroeconomic theme. But it is too handy to say
that increased taxes are good for the economy. It depends how the taxes are
used, what is payed.

I'm sure that's somewhat true. But even in the US, where taxes are
mainly used to pay for things military, tax increases have had, if
anything, a mildly positive effect on the economy, in terms of growth
rate anyway.

The theory that taxes are bad
seems to be based on an open loop model of the economy that views
production as "driving" the economy

I don't see the open loop. I see a top level they are controlling.

The open loop is this: production --> jobs-->goods/services-->consumption

By doing things -- such as cutting taxes, removing regulations, etc --
that should increase production you will cause an increase in jobs as
well as goods/services (economic growth) causing greater consumption.
This is the open loop model that is the basis of the "supply side
economics" of the right and the "common sense economics" on the left.
It is the reason why all politicians (in the US anyway) bow down to
the idea that increased taxes are bad. It's because increased taxes
supposedly reduce production (the start of the causal chain), which is
supposed to result in a reduction in jobs and growth. The fact that
this doesn't actually happen (as the data show) is apparently
irrelevant and I think it's because people, in the US anyway, to the
extent that they think about the macro economy at all, have in their
heads something like this open loop model of the economy.

Best

Rick

···

--
Richard S. Marken PhD
rsmarken@gmail.com