The Atheist Communist Caliphate Made Flesh, Spread the Clusterfuck Around Thread

[morpheus]

In short, they're plugging this stuff into an econometric model and reporting the results as fact?

[ChuckD]

In short, they're plugging this stuff into an econometric model and reporting the results as fact estimated impacts?

Yes.

One more point...

[Tank]

In short, they're plugging this stuff into an econometric model and reporting the results as fact estimated impacts?

Yes.

One more point...

I'm told Bar's totally back on the market...

[morpheus]

Intrepid Reader: Kurt : I prefer the one on the right.

[RV]

Deficit analysis from the old pink lady:

The story of today’s deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.

You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush’s policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category — the business cycle — accounts for 37 percent of the $2 trillion swing.

About 33 percent of the swing stems from new legislation signed by Mr. Bush.

Mr. Obama’s main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama’s agenda on health care, education, energy and other areas.

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: “Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he’s not fixing it.”

“And,” he added, “not fixing it is, in a sense, making it worse.”

Edited to add the methodology used for those who are interested:

http://economix.blogs.nytimes.com/2009/06/09/how-we-crunched-the-deficit-numbers/?ref=economy

[Oleg]

Deficit analysis from the old pink lady:

The story of today's deficits starts in January 2001, as President Bill Clinton was leaving office. The Congressional Budget Office estimated then that the government would run an average annual surplus of more than $800 billion a year from 2009 to 2012. Today, the government is expected to run a $1.2 trillion annual deficit in those years.

You can think of that roughly $2 trillion swing as coming from four broad categories: the business cycle, President George W. Bush's policies, policies from the Bush years that are scheduled to expire but that Mr. Obama has chosen to extend, and new policies proposed by Mr. Obama.

The first category — the business cycle — accounts for 37 percent of the $2 trillion swing.

About 33 percent of the swing stems from new legislation signed by Mr. Bush.

Mr. Obama's main contribution to the deficit is his extension of several Bush policies, like the Iraq war and tax cuts for households making less than $250,000. Such policies — together with the Wall Street bailout, which was signed by Mr. Bush and supported by Mr. Obama — account for 20 percent of the swing.

About 7 percent comes from the stimulus bill that Mr. Obama signed in February. And only 3 percent comes from Mr. Obama's agenda on health care, education, energy and other areas.

Alan Auerbach, an economist at the University of California, Berkeley, and an author of a widely cited study on the dangers of the current deficits, describes the situation like so: "Bush behaved incredibly irresponsibly for eight years. On the one hand, it might seem unfair for people to blame Obama for not fixing it. On the other hand, he's not fixing it."

"And," he added, "not fixing it is, in a sense, making it worse."

Edited to add the methodology used for those who are interested:

http://economix.blogs.nytimes.com/2009/06/09/how-we-crunched-the-deficit-numbers/?ref=economy

Now, with a pie chart!

[morpheus]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

I also found this interesting:

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don't cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Any economist who says that cap-and-trade (which I what I believe the writer is referring to, but he's being vague) won't be a drag on the economy and cost the government tax revenues, ceteris paribus, is crazy, dumb, or lying.  There's no way in hell that consumption won't be reduced, because the higher prices resulting from cap-and-trade will simply be passed on to the consumer.  Higher consumer energy prices -> Lower discretionary personal spending -> lower consumption -> lower GDP -> lower incomes -> lower tax revenues (and also higher unemployment, as final aggregate demand is reduced).

[Quality Start Machine]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

I also found this interesting:

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don't cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Any economist who says that cap-and-trade (which I what I believe the writer is referring to, but he's being vague) won't be a drag on the economy and cost the government tax revenues, ceteris paribus, is crazy, dumb, or lying.  There's no way in hell that consumption won't be reduced, because the higher prices resulting from cap-and-trade will simply be passed on to the consumer.  Higher consumer energy prices -> Lower discretionary personal spending -> lower consumption -> lower GDP -> lower incomes -> lower tax revenues (and also higher unemployment, as final aggregate demand is reduced).

The long-term effect is the INCENTIVE to come up with sources of energy that emit less carbon, thus being more cost-efficient. Better for the environment, and for the ledger.

[morpheus]

The AMA does not approve of the Obama plan for health care.

http://www.nytimes.com/2009/06/11/us/politics/11health.html

WASHINGTON — As the health care debate heats up, the American Medical Association is letting Congress know that it will oppose creation of a government-sponsored insurance plan, which President Obama and many other Democrats see as an essential element of legislation to remake the health care system.

The opposition, which comes as Mr. Obama prepares to address the powerful doctors' group on Monday in Chicago, could be a major hurdle for advocates of a public insurance plan. The A.M.A., with about 250,000 members, is America's largest physician organization.

[Oleg]

The AMA does not approve of the Obama plan for health care.

http://www.nytimes.com/2009/06/11/us/politics/11health.html

WASHINGTON — As the health care debate heats up, the American Medical Association is letting Congress know that it will oppose creation of a government-sponsored insurance plan, which President Obama and many other Democrats see as an essential element of legislation to remake the health care system.

The opposition, which comes as Mr. Obama prepares to address the powerful doctors' group on Monday in Chicago, could be a major hurdle for advocates of a public insurance plan. The A.M.A., with about 250,000 members, is America's largest physician organization.

In other news, Germany surrendered in 1945.

[morpheus]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

I also found this interesting:

If the analysis is extended further into the future, well beyond 2012, the Obama agenda accounts for only a slightly higher share of the projected deficits.

How can that be? Some of his proposals, like a plan to put a price on carbon emissions, don't cost the government any money. Others would be partly offset by proposed tax increases on the affluent and spending cuts. Congressional and White House aides agree that no large new programs, like an expansion of health insurance, are likely to pass unless they are paid for.

Any economist who says that cap-and-trade (which I what I believe the writer is referring to, but he's being vague) won't be a drag on the economy and cost the government tax revenues, ceteris paribus, is crazy, dumb, or lying.  There's no way in hell that consumption won't be reduced, because the higher prices resulting from cap-and-trade will simply be passed on to the consumer.  Higher consumer energy prices -> Lower discretionary personal spending -> lower consumption -> lower GDP -> lower incomes -> lower tax revenues (and also higher unemployment, as final aggregate demand is reduced).

The long-term effect is the INCENTIVE to come up with sources of energy that emit less carbon, thus being more cost-efficient. Better for the environment, and for the ledger.

1) it's a great INCENTIVE... but does that INCENTIVE not exist now?  Whoever ends up being the inventor of the Mr. Fusion power supply for Doc Brown's DeLorean is going to make crazy stupid money. 

2) You're getting away from my point anyway.  The point is that cap-and-trade is going to hose the economy under any model you choose, unless you decide to include a prediction that there will be a structural break such as the invention of the Mr. Fusion.  We cannot assume such a break, so therefore we have to analyze the economy under the current set of state variables.  Again: higher energy costs will hurt the consumer.  Hurt consumers spend less.  Consumption is something like 3/4 of GDP, so lower consumption leads to GDP contraction, which leads to job losses... and so on.  A notable effect of all this is a smaller tax base.  That was my point.  Cap and trade leads to tax revenue loss, so saying that it does not cost the government anything is disingenuous.

[Quality Start Machine]

The long-term effect is the INCENTIVE to come up with sources of energy that emit less carbon, thus being more cost-efficient. Better for the environment, and for the ledger.

1) it's a great INCENTIVE... but does that INCENTIVE not exist now?  Whoever ends up being the inventor of the Mr. Fusion power supply for Doc Brown's DeLorean is going to make crazy stupid money. 

2) You're getting away from my point anyway.  The point is that cap-and-trade is going to hose the economy under any model you choose, unless you decide to include a prediction that there will be a structural break such as the invention of the Mr. Fusion.  We cannot assume such a break, so therefore we have to analyze the economy under the current set of state variables.  Again: higher energy costs will hurt the consumer.  Hurt consumers spend less.  Consumption is something like 3/4 of GDP, so lower consumption leads to GDP contraction, which leads to job losses... and so on.  A notable effect of all this is a smaller tax base.  That was my point.  Cap and trade leads to tax revenue loss, so saying that it does not cost the government anything is disingenuous.
[/quote]

It's fucked anyway. Perfect time for implementing new strategies and policies.

[RV]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

Two things:

- The 1/3 isn't just the tax cuts - it also includes the prescription drug benefit (and other Bush legislation).

- On dynamic scoring:

In Washington, the debate became a bureaucratic battle focusing on the Congressional Budget Office and Joint Committee on Taxation, the two agencies responsible for advising Congress on the costs of budget and tax changes. By convention, both use "static" scorekeeping that assumes budget and tax changes have no effect on overall economic growth. Supply-side proponents have criticized both agencies relentlessly for this, but to no avail -- until last week.

Enter Douglas Holtz-Eakin, an economist on leave from Syracuse University and an avowed advocate of supply-side "dynamic" scoring. A few months ago, Republican congressional leaders plucked him out of a job at the White House and made him director of the CBO. Last week, in his agency's analysis of President Bush's tax and budget plan, he provided his new bosses with their first taste of dynamic scoring.

And in no case does Mr. Bush's tax cut come close to paying for itself over the next 10 years.

[morpheus]

Economics shit

I assume they used a static scoring model... and I'd be interested to see the same figures dynamically scored.  I.e., the Bush tax cuts of 2001 and 2003 changed how people behaved.  We've been over this, so I'm not going to argue that they were net revenue producers but I will argue that the true effect is not 1/3 of the swing.  We don't know what the economy would have done in absence of those tax cuts - we don't have the counterfactual.

Two things:

- The 1/3 isn't just the tax cuts - it also includes the prescription drug benefit (and other Bush legislation).

- On dynamic scoring:

In Washington, the debate became a bureaucratic battle focusing on the Congressional Budget Office and Joint Committee on Taxation, the two agencies responsible for advising Congress on the costs of budget and tax changes. By convention, both use "static" scorekeeping that assumes budget and tax changes have no effect on overall economic growth. Supply-side proponents have criticized both agencies relentlessly for this, but to no avail -- until last week.

Enter Douglas Holtz-Eakin, an economist on leave from Syracuse University and an avowed advocate of supply-side "dynamic" scoring. A few months ago, Republican congressional leaders plucked him out of a job at the White House and made him director of the CBO. Last week, in his agency's analysis of President Bush's tax and budget plan, he provided his new bosses with their first taste of dynamic scoring.

And in no case does Mr. Bush's tax cut come close to paying for itself over the next 10 years.

I'm sure glad I said above that I wasn't going to argue that the tax cuts paid for themselves.  Otherwise you might have wasted your time by trying to counter such an argument.

[Quality Start Machine]

Bottom line is, the Laffer Curve is bullshit.