The Times rejected the “conventional wisdom that raising any taxes during a downturn is wrong,” acknowledging that its view “is hard to explain and easy to demagogue.”

JK WOW, what an idea - repeat the mistakes of the 1930s.

A number of economists now think that most things that the government did back then only prolonged the depression and that it was Tojo that really pulled us out.

So far, this time, the government had the good sense to be sure most bank depositors did loose their life savings. That prevented runs on the banks and much more collapse. Can anyone explain why banks were allowed to loose depositors’s money in the thirties? (Years earlier, the Bank of England was preventing bank failures.)

thanks JK

For the life of me, I can never understand why New Deal-haters always seem to fall back on the claim that it was WWII that pulled us out of the recession (as Billy, above, does).

Isn't it obvious that gov't action during the war period -- massive deficit spending, an industrial policy, etc. -- was the New Deal on steroids?

As economist Dean Baker recently wrote:

"Roosevelt was too worried about the whining of the anti-stimulus crowd that he confronted. He remained concerned about balancing the budget when the proper goal of fiscal policy should have been large deficits to stimulate the economy. Roosevelt's policies substantially reduced the unemployment rate from the 25 percent peak when he first took office, but they did not get the unemployment rate back into single digits.

"It took the enormous public spending associated with World War II to fully lift the economy out of the depression. The lesson that economists take away from this experience is that we should be prepared to run very large deficits in order to give the economy a sufficient boost to generate self-sustaining growth."

Posted by: Dave | Jan 6, 2009 12:04:41 PM

For the life of me, I can never understand why New Deal-haters always seem to fall back on the claim that it was WWII that pulled us out of the recession (as Billy, above, does).

You can make a strong case for the contrary, that FDR's social agenda survived in spite of wartime economic pressures. LBJ largely failed because he couldn't balance the Great Society with the Viet Nam war. It's a moot point. Obama doesn't seemed poised to do anything like FDR.

Chuck Sheketoff: Billy/JK perpetuate a myth promoted on Fox News that the New Deal was prolonged by FDR's New Deal. Just as there probably "a number of scientists" who think aliens landed in Roswell New Mexico one could probably find "a number of economists" who think the New Deal prolonged the Depression -- that doesn't mean its true! JK: Nothing like a reply consisting entirely of ad hominian attacks - shows that you have no facts on your side.

Lets actually look at some facts:

Are you claiming that Smoot-Holly shortened the depression?

Are you claiming that letting the banks fail and loose depositors’s money helped shorten the depression?

Are you claiming that the September 1931 Fed, hike in its discount rate helped shorten the depression?

Are you claiming that the Revenue Act of 1932. The largest tax increase in peacetime history helped shorten the depression?

Are you claiming that Roosevelt’s devaluing the dollar by 40 percent helped shorten the depression?

Are you claiming that passage of the Agricultural Adjustment Act, which levied a new tax on agricultural processors and used the revenue for the destruction of crops and livestock and paying farmers for not working helped to shorten the depression?

I could go on, but you get the idea. (Thanks to Great Myths of the Great Depression for a number of facts used above.)

Thanks JK

Using Mussolini's definition that fascism is the union of corporate and State interests, JK's brand of "libertarianism" is better thought of as "fascibertariansim". They only want complete government non-interference so that corporations can have unfettered access. That's why real libertarians bristle at his rhetoric. The goal is anti-libertarian. That and the fact that he always works backward from an a priori conclusion, which is also antithetical of libertarian thinking.

Chuck Sheketoff: JK's chief source of his misinformation -- the Mackinac Center for Public Policy -- is the largest state-level conservative "think tank" in the country -- Cascade Policy Institute's biggest sibling. They are funded by large corporations and conservative foundations. The Mackinac Center was created in large part to oppose "government intervention" in public policy debates. JK: Are you incapable of anything except ad hominian attacks?

I used that paper as a list of claimed facts, not opinion or analysis. Did you find that any of the stated facts were wrong?

Are you trying to say that Smoot-Holly didn’t exist? Are you trying to say that banks didn’t fail and loose depositors’s money? Are you trying to say that the September 1931 Fed rate hike in its discount rate didn’t happen? Are you trying to say that Revenue Act of 1932 didn’t happen? Are you trying to say that it wasn’t the largest tax increase in peacetime history? Are you trying to say that Roosevelt didn’t devalue the dollar by 40 percent? Are you trying to say that the Agricultural Adjustment Act didn’t exist? Are you trying to say that it didn’t levy a new tax on agricultural processors and used the revenue for the destruction of crops and livestock and paying farmers for not working helped to shorten the depression?

If the facts are indeed wrong, let me know so I can give the report’s writers a hard time (I don’t like being lied to by either these people or Al Gore - do you?)

Conversely, if the facts are mainly correct, I await your fact based answer.

I am beginning to learn a lesson here - I thought the ad hominians were a mark of the climate change believers. It is starting to look like it is a wider amongst the progressives.

Thanks JK

The Progressivity of the Tax System

Lowest quintile: 4.3 percent Second quintile: 9.9 percent Middle quintile: 14.2 percent Fourth quintile: 17.4 percent Percentiles 81-90: 20.3 percent Percentiles 91-95: 22.4 percent Percentiles 96-99: 25.7 percent Percentiles 99.0-99.5: 29.7 percent Percentiles 99.5-99.9: 31.2 percent Percentiles 99.9-99.99: 32.1 percent Top 0.01 Percentile: 31.5 percent

These figures include all federal taxes, not just income taxes.

source

Of course, we can always tax the rich some more can't we.