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Forbes article about how economy works

The European economies that have tried austerity aren't exactly humming along. In fact, they are in worse shape than ours.

As with most economic articles, if the writer supports your preconceived positions, they are a genius. If the writer doesn't, they are an idiot.
 
That read more like a conservative campaign speech than an article about the economy. I'm no economist by any means, but I'm always wary of anyone who looks at one element of the economy (in this case, RBNRFI) and makes their case based on that one element. I'm not trying to discredit what he wrote (I'm sure there's a whole lot of truth in it), but there was an obvious bias, which makes it harder to take what he's saying at face value.
 
Good article. States fairly concisely why investment is the key to the economy and why "buisinesses won't stop hiring if you only increase taxes _%" is so transparently stupid.
 
Deadbolt said:
That read more like a conservative campaign speech than an article about the economy. I'm no economist by any means, but I'm always wary of anyone who looks at one element of the economy (in this case, RBNRFI) and makes their case based on that one element. I'm not trying to discredit what he wrote (I'm sure there's a whole lot of truth in it), but there was an obvious bias, which makes it harder to take what he's saying at face value.
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Not really. Business investment is important, but so is consumption, and what the author doesn't seem to understand is that the stimulus was facilitated by monetary expansion, it wasn't just redistributed tax revenue. Further, business investment doesn't tell the whole story, and it is very convenient of him to only consider non-residential business investment at a time when interest rates are so low. His conclusions are correct, but for the wrong reasons. A lack of business investment doesn't necessarily mean the economy is bad, it could just mean firms are substituting labor for capital investment, which is actually sometimes an indicator of a good economy. Of course, the fact that employment is also growing so anemically suggests that this isn't the case.
 
DreamOnDemOn said:
Good article. States fairly concisely why investment is the key to the economy and why "buisinesses won't stop hiring if you only increase taxes _%" is so transparently stupid.
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There is no "key" to the economy.
 
ChrisL68 said:
The European economies that have tried austerity aren't exactly humming along. In fact, they are in worse shape than ours.

As with most economic articles, if the writer supports your preconceived positions, they are a genius. If the writer doesn't, they are an idiot.
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As I've said before, the countries that have adopted austerity measures basically had no choice. They weren't seeing growth and their Debt/GDP ratio was over 100%. They were paying very high interest on the debt making a hard problem nearly impossible. The ECB knew that in order to get a sufficient bailout fund, Germany would have to be on board. Germany was very reluctant to do so without compromises from Greece initially and later other nations. Greece was on the verge of default; they needed the money immediately and desperately, so they had to pass austerity measures.

This wasn't about getting the economy moving again, it was about preventing contagion and the collapse of the EU. Which still very may well occur, but not because of austerity.
 
TR1982 said:
There is no "key" to the economy.
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Isn't capital what you use to make things? If you consume everything and don't save any capital, then eventually the consumption slows way down, does it not?
 
Caturday said:
As I've said before, the countries that have adopted austerity measures basically had no choice. They weren't seeing growth and their Debt/GDP ratio was over 100%. They were paying very high interest on the debt making a hard problem nearly impossible.
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Which is where we are headed if we don't start to deal with our debt. We are the prettiest pig in the mud. Yippee.
 
"Is this possible? Yes. Is it possible under Obama? No. Obama is the most virulently anti-investment president of the post-war era, and accordingly has delivered the worst economic performance of the post-war era."

Yep this guy doesn't have an ax to grind.

He's about as "fair and balanced" as Faux News.
 
RJKarl said:
"Is this possible? Yes. Is it possible under Obama? No. Obama is the most virulently anti-investment president of the post-war era, and accordingly has delivered the worst economic performance of the post-war era."

Yep this guy doesn't have an ax to grind.

He's about as "fair and balanced" as Faux News.
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Only he also happens to be right.
 
Only to extremists.

On January 19, 2001 the DJIA closed at 10,587.59
On January 16, 2009 it closed at 8281.22

During W's presidency the DJIA went down over 20%

On Jan 20, 2009 the DJIA closed at 7949.04
On May 2, 2012 it closed at 13,258.73
That's a 66.7% increase.

Hmmm which was worse for investors?
 
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RJKarl said:
Only to extremists.

On January 19, 2001 the DJIA closed at 10,587.59
On January 16, 2009 it closed at 8281.22

During W's presidency the DJIA went down over 20%

On Jan 20, 2009 the DJIA closed at 7949.04
On May 2, 2012 it closed at 13,258.73
That's a 66.7% increase.

Hmmm which was worse for investors?
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I feel like I repeat myself here over and over. You can't use the equities market as an indicator of the economy. It's not a picture of macro activity, look at the bond and currency markets to see how investors feel about the macroeconomy.
 
bobknightfan said:
A business that makes its hiring decisions based upon marginal changes in the tax rate is a business that is on shaky ground in the first place.
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Taking more away from someone in taxes on income reduces that person's incentive to earn income. Am I wrong on that?
 
bobknightfan said:
Quite possibly. Business has boomed in the past with marginal taxes rates that were much, much higher than they are now. Using moderate changes in the tax rates as an excuse for a disincentive to earn income....particularly considering that current rates are the lowest in history....is just setting up a strawman as an argument.
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Don't states that have low tax rates attract businesses and individuals away from states that have high tax rates?
 
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