Why did the economy boom during the 1950's when the top tax rate was 91%?

[56ktarget]

http://www.factandmyth.com/wp-content/uploads/2011/08/topmarginaltaxratesandg.jpg

[NewRightLibertarian]

Nobody paid that rate.

[56ktarget]

Good point, but the effective tax rate was still much higher than today:
http://www.washingtonpost.com/blogs/wonkblog/wp/2012/07/09/the-bush-tax-cuts-for-the-rich-in-two-charts/

[GunnyFreedom]

...and the Federal Reserve hadn't completely destroyed the Dollar yet.

[silverhandorder]

Many factors. We used to have more savings. Had more primary industry (manufacturing). Less regulations.

Effective taxes generally stay within several percentage points of each other anyways.

[56ktarget]

Less regulations.

I do not understand this. The 50s and 60s was when liberalism was at its peak. Can you point to any specific regulations that are hampering economic growth?

[oyarde]

I do not understand this. The 50s and 60s was when liberalism was at its peak. Can you point to any specific regulations that are hampering economic growth?

The EPA as a whole among many others.

[oyarde]

Nobody paid that rate.

That is correct.

[oyarde]

...and the Federal Reserve hadn't completely destroyed the Dollar yet.

That is correct.

[angelatc]

Because the relatively new entitlement system had not yet sucked the life out of the economy.

[VIDEODROME]

Maybe post World War 2 everyone else was rebuilding after we bombed them or they bombed each other.

[matt0611]

The late 40s and 50s had smaller government (less spending and lower regulations). No great society welfare programs. A psuedo-gold standard.

We also just disbanded the new deal programs and a large amount of the military from WW2. Most of the rest of the world was also in not that great of a shape for a while.

[oyarde]

Because the relatively new entitlement system had not yet sucked the life out of the economy.

Yes.

[The economist]

The faster growth was because they were better savers. Savings is what creates long run economic growth because it creates investment.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=W206RC1Q156SBEA&scale=Left&range=Max&cosd=1947-01-01&coed=2013-07-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=lin&vintage_date=2014-01-21&revision_date=2014-01-21
http://research.stlouisfed.org/fred2/data/W207RC1Q156SBEA_Max_630_378.png


[post deleted]. Can you please debate people with other views without being rude.

[eduardo89]

Can you please debate people with other views without being rude.

You obviously haven't met Danke.

[The economist]

You obviously haven't met Danke. Well I am a newbie, but I have looked at a lot of older posts dear Generalissimo.

[Todd]

Many factors. We used to have more savings. Had more primary industry (manufacturing). Less regulations.

Effective taxes generally stay within several percentage points of each other anyways.



Dude is using a False Cause fallacy anyhow. I'll hold my breath that he would look at any alternative conclusions for then and now.

[juleswin]

It also has something to do with that fact that Europe was still recovering from the destruction of WWII. If high taxes and high regulation was the key to prosperity, why are poor countries not doing it? As opposed to low taxes and minimal intervention/regulation, govt have all the incentive in the world to collect high taxes and impose regulation to make em selves seem useful.

I wish we can give the state-ists one half of the country to try out their economic policy and the other half to anarchist to do the same and at the end of 30 yrs, we can come back and see which side is more successful.

[The economist]

I would point out that other countries being damaged from WWII hurt our economy.

If Iowa suddenly had a natural disaster that causes it to fly into space would Florida benefit? No because in a world of trade other people being wealthy means we become more wealthy because then we can trade more with each other.

[juleswin]

I would point out that other countries recovering from WWII hurt our economy.

If Iowa suddenly had a natural disaster that causes it to fly into space would Florida benefit? No because in a world of trade other people being wealthy means we become more wealthy because then we can trade more with each other.

Come on man, dont imagine Iowa flying into space, instead imagine Iowa's industrial sector grinding to a halt, and now Iowa and its customers have to buy everything from you while they recovered. Yes, it is sure going to help you a lot at least in relative terms.

[The economist]

Come on man, dont imagine Iowa flying into space, instead imagine Iowa's industrial sector grinding to a halt, and now Iowa and its customers have to buy everything from you while they recovered. Yes, it is sure going to help you a lot at least in relative terms. There was no export boom from the destruction. Exports just went back to their pre WW2 level. When their economy recovered they bought stuff mostly from themselves.
http://www.realitybase.org/storage/macroeconomics/US%20foreign%20trade%20as%20pct%20of%20GDP%2010092 9.png?__SQUARESPACE_CACHEVERSION=1285791599538

[Demigod]

http://www.factandmyth.com/wp-content/uploads/2011/08/topmarginaltaxratesandg.jpg

Germany and Japan were burned to the ground ,France and Italy were on the verge of a communist rebellion and their governments could hardly create order, parts of central and entire eastern Europe were taken over by the soviets which for the next 5-10 years ( depending on the country ) were pillaging the region.China was in a civil war, Spain and Portugal were dictatorships. And everyone had most of their industry destroyed either trough bombardment or sabotage.

On the other hand the USA had all the resources + untouched industry and infrastructure + what were essentially colonies around the world which bought everything you produced.If you see Brazil and Argentina were booming like crazy in that period as well because they were industrialized countries that were not affected in any way by the great wars.It is simple the world wanted to maintain the standard of living from before the war while only you and a few countries in South America had the industry and economy to produce products that were necessary for that lifestyle.

As the world rebuilt it self the USA started losing one industry after another to foreign countries.If you think that a 91% tax rate is what caused a boom than with SU`s tax rate I should be living in paradise right now but instead I live in a country where 350 euros ( 450 + dollars ) is an average paycheck ,and that is per month not per week or day.

[GunnyFreedom]

The faster growth was because they were better savers. Savings is what creates long run economic growth because it creates investment.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=W206RC1Q156SBEA&scale=Left&range=Max&cosd=1947-01-01&coed=2013-07-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Quarterly&fam=avg&fgst=lin&transformation=lin&vintage_date=2014-01-21&revision_date=2014-01-21
http://research.stlouisfed.org/fred2/data/W207RC1Q156SBEA_Max_630_378.png

Can you please debate people with other views without being rude.

All wealth comes from savings. Savings used to be a lot easier because the Federal reserve wasn't actively destroying the dollar as badly as they are now. Savings used to be a winning proposition but today, unless you can afford securities and real investments, now savings has become a losing proposition. Unless you are already wealthy, nowadays you take a loss on purchasing power if you try to save. It's not like it used to be. The broken policies of fiat and the Federal Reserve have penalized and discouraged savings, leading to a more consumption based economy creating the wealth inequality we have today.

[The economist]

All wealth comes from savings. Savings used to be a lot easier because the Federal reserve wasn't actively destroying the dollar as badly as they are now. Savings used to be a winning proposition but today, unless you can afford securities and real investments, now savings has become a losing proposition. Unless you are already wealthy, nowadays you take a loss on purchasing power if you try to save. It's not like it used to be. The broken policies of fiat and the Federal Reserve have penalized and discouraged savings, leading to a more consumption based economy creating the wealth inequality we have today. The Fed is not to blame for the reduction in the savings rate. Inflation just a little higher then the period between 1955 and 1965.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=CPIAUCSL&scale=Left&range=Max&cosd=1947-01-01&coed=2013-12-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Annual&fam=avg&fgst=lin&transformation=pc1&vintage_date=2014-01-22&revision_date=2014-01-22

[Seraphim]

Because Europe was destroyed during WW2 and was rebuilding. It bought it's products from the USA for gold.

Gold flowed into the USA and products flowed out.

[Seraphim]

In terms of the tax rate, this is true.


Nobody paid that rate.

[GunnyFreedom]

The Fed is not to blame for the reduction in the savings rate. Inflation just a little higher then the period between 1955 and 1965.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=CPIAUCSL,M2SL&scale=Left,Left&range=Custom,Max&cosd=1947-01-01,1959-01-01&coed=2013-12-01,2013-12-01&line_color=%230000ff,%23ff0000&link_values=false,false&line_style=Solid,Solid&mark_type=NONE,NONE&mw=4,4&lw=1,1&ost=-99999,-99999&oet=99999,99999&mma=0,0&fml=a,a&fq=Annual,Annual&fam=avg,avg&fgst=lin,lin&transformation=pc1,pc1&vintage_date=2014-01-21,2014-01-21&revision_date=2014-01-21,2014-01-21

Edit: I am not speaking against the Quantity theory of money, only that the fed is not to blame for the reduction of the savings rate.

If you actually believe the CPI then there ain't no helping you. Fedgov openly manipulates it, they don't even try to hide it.

http://glenbradley.net/images/share/sgs-cpi.gif

Because they manipulate the CPI right out in the open, the fact that you accept the CPI at all either means you are far too ignorant to be an economist, or you are actively shilling the propaganda. In either case there isn't likely any help for you.

[Anti Federalist]

Because, outside of the US, the entire industrial world laid in smoking ruin.

We have been prosperous in spite of government, not because of it.

Now that prosperity is coming to a designed and planned end.

[Original_Intent]

Rosie the riveter have anything to do with it?

I mean, during the war wasn't everyone whipped into a frenzy to produce for the war effort and also consume as little as possible so we could repair all those windows we were breaking?

Rather than saying the economy was booming, wasn't GDP booming because anyone who could fog a mirror was working?

[eduardo89]

Well I am a newbie, but I have looked at a lot of older posts dear Generalissimo.

Yeah, you're definitely a newbie.

And if you're going to refer to me using one of my old username, I'd rather you used Confederate. That was my favourite.

[Danke]

Yeah, you're definitely a newbie.

And if you're going to refer to me using one of my old username, I'd rather you used Confederate. That was my favourite.

If he knows those names, I doubt he is a "newbie."

[The economist]

If you actually believe the CPI then there ain't no helping you. Fedgov openly manipulates it, they don't even try to hide it.

http://glenbradley.net/images/share/sgs-cpi.gif

Because they manipulate the CPI right out in the open, the fact that you accept the CPI at all either means you are far too ignorant to be an economist, or you are actively shilling the propaganda. In either case there isn't likely any help for you.Brad Delong, Greg Mankiw, Ben Bernanke and Alan Greenspan accept the CPI. Are you saying they are too far ignorant to be economist?
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPDEF,PCEPILFE,CPILFESL&scale=Left,Left,Left&range=Custom,Custom,Custom&cosd=1960-01-01,1960-01-01,1960-01-01&coed=2013-07-01,2013-11-01,2013-12-01&line_color=%230000ff,%23006600,%23ff6600&link_values=false,false,false&line_style=Solid,Solid,Solid&mark_type=NONE,NONE,NONE&mw=4,4,4&lw=1,1,1&ost=-99999,-99999,-99999&oet=99999,99999,99999&mma=0,0,0&fml=a,a,a&fq=Annual,Annual,Annual&fam=avg,avg,avg&fgst=lin,lin,lin&transformation=pc1,pc1,pc1&vintage_date=2014-01-22,2014-01-22,2014-01-22&revision_date=2014-01-22,2014-01-22,2014-01-22

[The economist]

Yeah, you're definitely a newbie.

And if you're going to refer to me using one of my old username, I'd rather you used Confederate. That was my favourite. But I am a Yankee doodle.

[GunnyFreedom]

Brad Delong, Greg Mankiw, Ben Bernanke and Alan Greenspan accept the CPI. Are you saying they are too far ignorant to be economist?
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=GDPDEF,PCEPILFE,CPILFESL&scale=Left,Left,Left&range=Custom,Custom,Custom&cosd=1960-01-01,1960-01-01,1960-01-01&coed=2013-07-01,2013-11-01,2013-12-01&line_color=%230000ff,%23006600,%23ff6600&link_values=false,false,false&line_style=Solid,Solid,Solid&mark_type=NONE,NONE,NONE&mw=4,4,4&lw=1,1,1&ost=-99999,-99999,-99999&oet=99999,99999,99999&mma=0,0,0&fml=a,a,a&fq=Annual,Annual,Annual&fam=avg,avg,avg&fgst=lin,lin,lin&transformation=pc1,pc1,pc1&vintage_date=2014-01-22,2014-01-22,2014-01-22&revision_date=2014-01-22,2014-01-22,2014-01-22

If they accept CPI they are. The gov OPENLY states that they remove stuff as it gets more expensive, and then they substitute cheaper goods to "prevent it showing a rate too high."

When filet mignon gets too expensive they replace it with sirloin. When sirloin gets too expensive they replace it with cube steak. When cube steak gets too expensive they replace it with hamburger. When hamburger gets too expensive they replace it with bologna. At the end of the day, you are buying bologna for what you used to pay for filet mignon, and Brad Delong, Greg Mankiw, Ben Bernanke and Alan Greenspan laugh and say "there is no inflation!"

The CBO doesn't hide this, they do it right out in the open. So anybody who accepts CPI is unqualified to be an economist. Period.

[The economist]

If they accept CPI they are. The gov OPENLY states that they remove stuff as it gets more expensive, and then they substitute cheaper goods to "prevent it showing a rate too high."

When filet mignon gets too expensive they replace it with sirloin. When sirloin gets too expensive they replace it with cube steak. When cube steak gets too expensive they replace it with hamburger. When hamburger gets too expensive they replace it with bologna. At the end of the day, you are buying bologna for what you used to pay for filet mignon, and Brad Delong, Greg Mankiw, Ben Bernanke and Alan Greenspan laugh and say "there is no inflation!"

The CBO doesn't hide this, they do it right out in the open. So anybody who accepts CPI is unqualified to be an economist. Period. It is because the CPI overestimates inflation unless they do it. Driving a car blind is not a good idea.

By making the inflation rate more accurate it helps the Fed conduct monetary policy.

[GunnyFreedom]

It is because the CPI overestimates inflation unless they do it. Driving a car blind is not a good idea.

By making the inflation rate more accurate it helps the Fed conduct monetary policy.

In 1985, you could buy filet mignon for $3.65 a pound (http://articles.sun-sentinel.com/1985-10-11/news/8502140344_1_aston-martin-lagonda-pound-cars). In 2014, average to premium bologna will cost you $5.50 (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=1119401) to (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=784173) $8.50 (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=882113) a pound. Lo and behold, the CPI Inflation Calculator (http://www.usinflationcalculator.com/) claims that $3.65 in 1985 dollars, is equivalent to $7.90 in 2014 dollars - precisely equal to substitution bologna for filet; while the filet will set you back $17.99 (http://grocery.harristeeter.com/pd/Harris-Teeter-Rancher/Beef-Tenderloin-Filet-Mignon/1-each/201389000005/) - a full 228% greater rate than the CPI.

[The economist]

In 1985, you could buy filet mignon for $3.65 a pound (http://articles.sun-sentinel.com/1985-10-11/news/8502140344_1_aston-martin-lagonda-pound-cars). In 2014, average to premium bologna will cost you $5.50 (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=1119401) to (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=784173) $8.50 (http://shop.mywebgrocer.com/Shop.aspx?shopurl=http://shop.mywebgrocer.com/ProductDetail.aspx&strid=031F1523&pid=882113) a pound. Lo and behold, the CPI Inflation Calculator (http://www.usinflationcalculator.com/) claims that $3.65 in 1985 dollars, is equivalent to $7.90 in 2014 dollars - precisely equal to substitution bologna for filet; while the filet will set you back $17.99 (http://grocery.harristeeter.com/pd/Harris-Teeter-Rancher/Beef-Tenderloin-Filet-Mignon/1-each/201389000005/) - a full 228% greater rate than the CPI. Food prices have gone up far faster then other goods and services. Inflation is more then the prices of food.

[erowe1]

Because, despite what you might conclude from a single contextless number, like what the top tax rate was, the total cost of the federal government decreased rapidly and significantly after WW2 ended.

[erowe1]

It is because the CPI overestimates inflation unless they do it.

Unless they switch out the products whose prices they're tracking with cheaper products, the CPI overestimates inflation?

So the accurate inflation rate is the one that compares the price of yesterday's steak with today's bologna? And the inaccurate one is the one that compares steak with steak?

Please change your screen name.

[GunnyFreedom]

Food prices have gone up far faster then other goods and services. Inflation is more then the prices of food.

You mean like fuel? :D

[GunnyFreedom]

Food prices have gone up far faster then other goods and services. Inflation is more then the prices of food.

How about the cost of a house? :D :D

[The economist]

Unless they switch out the products whose prices they're tracking with cheaper products, the CPI overestimates inflation?

So the accurate inflation rate is the one that compares the price yesterday's steak with today's bologna? And the inaccurate one is the one that compares steak with steak? For example lobster was dirt cheap in the 30s and a luxury 35 years later. Tracking the same product would overestimate inflation.


Please change your screen name. So the proffesor of Harvard and Princeton economics classes should stop calling themselves economist because they accept the CPI. :rolleyes:

[The economist]

You mean like fuel? :D The price of Fuel is too volatile to be used in a reliable inflation tracker for monetary policy when excluding it works just fine. And naturally using a single product in an inflation argument is a pure fallacy.


How about the cost of a house? :D :D Does not count.

[GunnyFreedom]

The price of Fuel is too volatile to be used in a reliable inflation tracker.

Does not count.

Because people clearly don't drive, don't heat their homes, don't live in houses, and don't eat anymore.

In other words, anytime the costs of things that people actually DEPEND on increase, they are removed from the CPI to keep the rates low.

And you defend this practice and call it "accurate."

Like I said, completely unqualified to be an economist, and doubly-so if they come from ideological indoctrination camps like Harvard and Princeton.

[erowe1]

So the proffesor of Harvard and Princeton economics classes should stop calling themselves economist because they accept the CPI. :rolleyes:

I'm not talking about a professor at Harvard and Princeton. I'm talking about you.

[The economist]

Because people clearly don't drive, don't heat their homes, don't live in houses, and don't eat anymore.

In other words, anytime the costs of things that people actually DEPEND on increase, they are removed from the CPI to keep the rates low.

And you defend this practice and call it "accurate."

Like I said, completely unqualified to be an economist, and doubly-so if they come from ideological indoctrination camps like Harvard and Princeton. A populist rejecting the best economists in the world because his ideology does not fit with them. You remind me of commies.

[The economist]

I'm not talking about a professor at Harvard and Princeton. I'm talking about you. But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

[erowe1]

But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

No, I'm saying you should because you obviously don't know what you're talking about, can't defend your own position, and are the furthest thing from an economist of any kind.

[The economist]

No, I'm saying you should because you obviously don't know what you're talking about, can't defend your own position, and are the furthest thing from an economist of any kind. Says the "end the fed" guy. :rolleyes:

[erowe1]

Says the "end the fed" guy. :rolleyes:

Do you think that it is within the purview of economists to disagree with my prescription to end the Fed?

[GunnyFreedom]

But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

You do know that "Appeal to Authority" is a logical fallacy, right? Likewise "equivocation" wherein the CPI thinks bologna is equivalent to filet mignon. You don't really have anything but logical fallacies, actually, and yet you consider yourself an economist.

Economics is not voodoo, it's math and logic. If your economic philosophy is described in logical fallacies, then your economic philosophy is fallacious.

^^ that is what we educated people call "a logical argument."

[GunnyFreedom]

A populist rejecting the best economists in the world because his ideology does not fit with them. You remind me of commies.

That would be an ad hominem in conjunction with poisoning the well. Also logical fallacies. :)

[juleswin]

Do you think that it is within the purview of economists to disagree with my prescription to end the Fed?

This is the same guy that thinks high tax rates after WWII had more to do with economic growth than the fact that the competition in Europe got its factories destroyed. The "economist" in the name is similar to the way a tall person is called shortie i.e. he is the opposite of one.

[GunnyFreedom]

Says the "end the fed" guy. :rolleyes:

Specifically poisoning the well with an ad hominem. This time you put both together into a single phrase. You are getting better at this. :)

[RickyJ]

The rest of the world was mostly devastated from WW2, while we only had one attack on our soil and none on our mainland. That is the key reason the USA prospered after WW2, we were the manufacturing center of the world at that time.

[erowe1]

The rest of the world was mostly devastated from WW2, while we only had one attack on our soil and none on our mainland. That is the key reason the USA prospered after WW2, we were the manufacturing center of the world at that time.

It's not just that, but throughout WW2 our economy was held down by the burden of a massive expansion of government. When that burden was eased, as it was drastically after the war ended, the economy naturally boomed. As Robert Higgs has demonstrated, the real end of the Great Depression coincided with the post-WW2 demilitarization.

See his Depression, War, and Cold War, along with many of his other books:
http://www.independent.org/store/book.asp?id=65

[Seraphim]

Accepting something and it being fact/accurate can be two entirely different things.


But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

[Danke]

Food prices have gone up far faster then other goods and services. Inflation is more then the prices of food.


http://www.youtube.com/watch?v=CjVKUap1HgU

[Seraphim]

So staples to livelyhood do not count?

You're either brainwashed or rationalizing the monetary system because you lack the creativity and principals required to see a better way.

Not including fuel because it is too volatile is a disingenius load of crap. Inflation data is most useful when taken within a context of years. The volatility smooths out over the long term, in terms of prices. It is the long term trend that is important. Disregarding it because the prices can change a lot month to month is a pathetic rationalization.


The price of Fuel is too volatile to be used in a reliable inflation tracker for monetary policy when excluding it works just fine. And naturally using a single product in an inflation argument is a pure fallacy.

Does not count.

[kcchiefs6465]

So staples to livelyhood do not count?

You're either brainwashed or rationalizing the monetary system because you lack the creativity and principals required to see a better way.

Not including fuel because it is too volatile is a disingenius load of crap. Inflation data is most useful when taken within a context of years. The volatility smooths out over the long term, in terms of prices. It is the long term trend that is important. Disregarding it because the prices can change a lot month to month is a pathetic rationalization.
But Paul Krugman said....

[GunnyFreedom]

And the reason they eliminated housing and switched to rent, was because home prices were climbing too much to maintain a low CPI. Problem is that home inflation was generated by the Federal Reserve and the "Too Big To Fail" banker oligarchy, to pad their own bottom lines, and led directly to the housing crisis. If home prices HAD stayed in the CPI, then even these Keynesians maybe would have spotted the Housing Crisis in advance like we all did.

Not to mention that the actual price of homes have an actual effect on the lives of people on the ground, and deserve to be considered.

[Zippyjuan]

Actually in the CPI calculations, they don't use the selling price of houses but what a comparable home would rent out for. They have done this for decades- it isn't any recent change.

Each item in the CPI is given a weighting based on the percent of income that the average person spends on that item and category (over 60,000 items are examined). Food takes about eleven percent of the average person's income so it counts as 11% of the CPI. If the CPI is 100 and the price of food doubles while all other prices remain the same, then the overall rate of inflation would be 11% (the index increases by 11- the weight given to food since food was 11 and doubled to 22). But we notice the price of food more than other things since we buy it more often so it may seem like overall price inflation is higher.

Energy is counted too. Since there are multiple CPI figures, some believe that food and energy do not count. That is wrong. In the Core CPI (which is the usual figure cited and the one used in calculating say cost of living increases) they do count.

As for Shadowstats, the CPI is a basket of goods the average person buys. That changes over time (you could not get a LCD TV 20 years ago and don't buy a transistor radio today for examples). The basket gets updated every ten years (based on surveys and info from the US Census). ShadowStats is still using the 1980 basket of goods. Sony Walkmans and VCRs instead of computers and cell phones.

[oyarde]

Well I am a newbie, but I have looked at a lot of older posts dear Generalissimo.

Jumbo Shrimp was my favorite ....

[erowe1]

Jumbo Shrimp was my favorite ....

I kind of liked Debbie Downer.

[GunnyFreedom]

I kind of liked Debbie Downer.

Debbie Downer was kind of an ass, actually. I think he lets his usernames go to his head.

[angelatc]

But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

Appeal to authority fallacy. It is clearly established that some of us do not agree that the CPI is accurately calculated. We do not dispute that some, maybe even all, nationally known economists disagree.

But at least one of us has laid out the reasons he disagrees with the calculation, being summarized by me as the fact that it simply seems to randomly exclude anything that would skew it dramatically.

I think at some point we would agree that taking the cost of a horse and buggy out of the equation would be sensible. But at that point, the onus was on you to explain why those experts believe the methodology is in fact more accurate than one that includes costs of housing and energy.

If you can't do that, you're in over your head.

[oyarde]

I think a better thread would be the reasons why the economy will not boom again......

[Todd]

Appeal to authority fallacy. It is clearly established that some of us do not agree that the CPI is accurately calculated. We do not dispute that some, maybe even all, nationally known economists disagree.

But at least one of us has laid out the reasons he disagrees with the calculation, being summarized by me as the fact that it simply seems to randomly exclude anything that would skew it dramatically.

I think at some point we would agree that taking the cost of a horse and buggy out of the equation would be sensible. But at that point, the onus was on you to explain why those experts believe the methodology is in fact more accurate than one that includes costs of housing and energy.

If you can't do that, you're in over your head.



He can't...

He apparently bought into that false notion that Ivy league schools actually produce the best and the brightest who are uniquely qualified to be the only experts on Economics.

[NorthCarolinaLiberty]

"The economist." LOL.

Yeah, I played in the majors last year and hit 40 home runs.

[NorthCarolinaLiberty]

So the proffesor of Harvard and Princeton economics classes...


But me and the economics proffesors...


Professor is spelled with one f. --The Etymologist


(See, I can be a dick too; just the like person who joins a forum and doesn't want to learn anything.)

[GunnyFreedom]

Professor is spelled with one f. --The Etymologist


(See, I can be a dick too; just the like person who joins a forum and doesn't want to learn anything.)

You forgot an even more glaring (to me) issue:

"...but the economic professors and I..." :D

[NorthCarolinaLiberty]

You forgot an even more glaring (to me) issue:

"...but the economic professors and I..." :D

Yeah, that also made me laugh. Probably more a narcissism thing than bad grammar. Dipshit probably has his very own Bloomsbury Group, too.

[Occam's Banana]

Professor is spelled with one f. --The Etymologist

And two of 's' - thus, "professor" and not "proffesor."

[GunnyFreedom]

Yeah, that also made me laugh. Probably more a narcissism thing than bad grammar. Dipshit probably has his very own Bloomsbury Group, too.

Well, he sure as heck didn't write like educated people do. If he wanted to come off as though he were educated, he probably should have used proper spelling and grammar. I am sure the folks who come out of Princeton and Harvard mostly use proper spelling and grammar.

[Czolgosz]

Why did a particular cuntry, around 1776, become such a powerhouse and a beacon for prosperity?

Why is that same cuntry now a mediocre turd?

[oyarde]

"The economist." LOL.

Yeah, I played in the majors last year and hit 40 home runs.

Only home runs I ever hit were inside the park , I stole home more often, threw more no hitters ( some of which I actually lost, I walked a " few" )never went to an Ivy League school or played in the majors :) , I learned all the Ekonomics , lol ,I ever needed on the family farm before I was old enough to vote .

[oyarde]

Well, he sure as heck didn't write like educated people do. If he wanted to come off as though he were educated, he probably should have used proper spelling and grammar. I am sure the folks who come out of Princeton and Harvard mostly use proper spelling and grammar.

I dunno about that , but when I was younger , saw some pretty good basketball played @ Princeton and Football @ Harvard and Yale.....

[erowe1]

Only home runs I ever hit were inside the park , I stole home more often, threw more no hitters ( some of which I actually lost, I walked a " few" )never went to an Ivy League school or played in the majors :) , I learned all the Ekonomics , lol ,I ever needed on the family farm before I was old enough to vote .

All that pales next to the fame you've earned by making a mean can of ravioli, Chef B.

[osan]

http://www.factandmyth.com/wp-content/uploads/2011/08/topmarginaltaxratesandg.jpg

This is a weakly oblique attempt at implying causal linkage between the two.

FAIL.

We're talking about the largest economy on the planet, inherently complex and along certain lines nonlinear. Once the number of variables under consideration in a complex system surpasses three or four, predictability drops rapidly and determination of precise relationships between any two factors becomes complicated on its best day.

You seem either a troll or in need of a lot of additional learning. Or both.

[osan]

Because the relatively new entitlement system had not yet sucked the life out of the economy.

This is a VERY big factor.

[osan]

The Fed is not to blame for the reduction in the savings rate. Inflation just a little higher then the period between 1955 and 1965.
http://research.stlouisfed.org/fred2/graph/fredgraph.png?&id=CPIAUCSL&scale=Left&range=Max&cosd=1947-01-01&coed=2013-12-01&line_color=%230000ff&link_values=false&line_style=Solid&mark_type=NONE&mw=4&lw=1&ost=-99999&oet=99999&mma=0&fml=a&fq=Annual&fam=avg&fgst=lin&transformation=pc1&vintage_date=2014-01-22&revision_date=2014-01-22

In positive reality the CPI is a meaningless measure because the standard of measurement has been repeatedly altered.

That aside, the vast majority of inflation as we know it is due to currency devaluation and not scarcity issues. This is built-in inflation - it is engineered - part and parcel of the fabric of the currency and has NOTHING to do with the economy in the sorts of terms one would expect to discuss. Currency inflation is proof of that currency's unsuitability to the purpose for which it was to ostensibly serve as MONEY. It is neither durable nor a store of wealth. It is an atricle of exchange that sinks wealth away from the bearer in either absolute or relative terms. The best one can hope for with garbage currencies is to minimize losses, in most cases. Of course, if one has magical luck or some inside information, huge gains can still be had, but they will always be smaller than those that would be realized if one's transactions were made with real money. All else equal, real money does not lose value and the only inflation one experiences arises from increased relative scarcity of a given commodity.

[osan]

Brad Delong, Greg Mankiw, Ben Bernanke and Alan Greenspan accept the CPI. Are you saying they are too far ignorant to be economist?



One need not be clued-out to accept CPI.

How do you know they actually accept it, personally speaking? They may be advocates for any of a number of less-than-honest reasons. I will add that none of those reasons need involve explicit conspiracy. Going along to get along is a well proven formula for success, especially in fields of endeavor where being an outlier or even questioning the orthodoxy is most likely to result in career suicide.

[osan]

Says the "end the fed" guy. :rolleyes:

Wow... such sweeping force of argument. Color me bowled over.

Jesus...

[osan]

But me and the economics proffesors in Harvard and Princeton all accept the CPI. And you say I should remove my screen name because of it.

Lots of "authoritative" figures also accepted the world as flat and that burning people at the stake was a good idea.

Methinks it's time to stop feeding this troll.

/thread

[NorthCarolinaLiberty]

And two of 's' - thus, "professor" and not "proffesor."

You know, I missed that he only had one letter S. Doh!

[Zippyjuan]

http://www.factandmyth.com/wp-content/uploads/2011/08/topmarginaltaxratesandg.jpg

Marginal tax rate is the tax rate applied to the last dollar earned. But that does not apply to all dollars so the average tax rate on income is considerably lower. Dollars are not taxed if they are below a certain amount. Then deductions and exclusions further reduce taxable income. The 90% Marginal Tax Rate applied to less than one percent of the highest income earner's income. And this chart only shows the maximum marginal tax rate applied to the highest income earners. It says absolutely nothing about taxes actually paid by an average person so it doesn't provide any useful information. Last year, about 46% of all who filed tax returns owed zero in Federal Income taxes.

[Bryan]

Why did the economy boom during the 1950's when the top tax rate was 91%?


For the sake of argument, let's say you statement is correct, that the economy did boom when there was a top tax rate of 91%.

Question- does that make it right? Did the people being taxed 91% agree to this? One can presume they didn't, so what is the justification for this tax? Does the benefit to the whole ("the economy") make it morally and ethically acceptable to tax someone at 91%? What about 92%? Or 93%, 94%, ... 99%? Why not just take it all if it makes the economy boom? Why not, since that is the objective here.

So let's say that the people being taxed 91% didn't agree to this, but were fine paying for services they utilized such that they helped pay for the roads they use, they pay for local fire and police protection, patent filling fees, court costs and such. Let's say this voluntary exchange doesn't come close to 91%, should the rest still be taken? Can you explain how it makes it right for a group of people to lay claim to the wages and earnings of someone else in this case? Remember, the government is nothing more than a group of people.

Another question- if one person doesn't have the right to do something to someone else, how could a group of those same people have the right? It doesn't make sense, does it? One person can't, two people can't, three can't, and so on, there is no magic number that suddenly makes it OK. Regardless of the group size, taking from others violates the principle of self-ownership, which is that you own yourself and the product of your work. Other people do not own you, or the fruits of your labor, just like you do not own theirs. Many consider the principle of self-ownership as a natural right.

Again, for augments sake, let's say that you wanted to take the 91% anyway, we'll end up with some questions similar to other situations (http://www.ronpaulforums.com/showthread.php?441915-America-has-the-highest-gun-violence-in-the-world&p=5383794&viewfull=1#post5383794):

- Assuming someone is running their own business, how would you propose that these taxes be collected?
- Would you expect for everyone to comply and pay their taxes, at whatever rate the group decides they owe?
- Would you support going door to door to confiscate the tax money if people did not pay?
- Would you support breaking into peoples homes if they did not answer the door?
- Would you support using aggressive measures against individuals to separate them from their money within their homes?
- Would you support killing people to get their tax money, if that's what it took?
- Do you support an ideology that generates war? If you answer "yes" to the previous question you are in fact foresting war. As well, if you're willing to fully disregard what others consider as a natural right, you're fostering war.


Let's say you're willing to brush off the principle of self-ownership anyway and establish a suitable collection / punishment structure to get the taxes, and so now you're getting the 91% rate. Are all the problems solved? Not quite, since with taxing at 91% you'll run into other issues. As a simple example, say we're considering a tomato grower and for every 10 tomato plants they grow the collection system took 9 of them, why would this person want to continue to grow tomatoes? Do you think that they may decide it's too much work for what they get and just give up, or maybe they'll start to hide their production, thus requiring a larger collection / punishment structure to prevent cheating the system? So, really, where are you going to draw the line? Can you see there are consequences for violating the principle of self-ownership?

So what can be done if you're not happy about the status quo, and see thing as the rich getting richer? Plenty can be done. Here, let's consider a three step process:

1. Understand and respect the natural rights bestowed upon us as related to the issue.
2. Devise good government policy (which does not violate step #1).
3. Devise an effective personal social policy.

So for step one, we can see that the principle of self-ownership prevents the taking of others earnings. Step two is where things start to get interesting, and is at the heart of the "rich getting richer" issue in that government policy / law is quite often manipulated by the elite wealthy class for their own self serving interests. This is what needs to stop, and it can be done. There are some clear and obvious examples of this such as corporate handouts, special privileges that only corporations enjoy, manipulation of regulations to benefit big corporations, manipulation of trade agreements and so on. These need to stop.

There is one major root problem however, the Federal Reserve System, which puts the control of our entire money supply into the hands of seven people. Seven. We tend to be feed information that these board members are looking out for the best interests of the country but many here say they end up serving the interest of the elite banking class allowing for easy profits of countless billions a year. Talk about the rich getting richer...

Consider the possibility that the seven board members, who are each serving 14 year terms, pre-plan out the highs and lows of interest rates for the next 8 years, a road-map of sorts, and only share that with an elite few. Do you have any idea how much that information would be worth? That's just the beginning of the problems with the Federal Reserve System, I highly recommend doing some research if you haven't, here is a 42 minute video I would suggest for starters: https://www.youtube.com/watch?v=YLYL_NVU1bg

On to step 3, effective personal social policy. If at any point you see an individual / company that is manipulating the system, or they are using business practices that you morally object to (such as laborers in poor working conditions, not paying a living wage, predatory business practices) you can always boycott the business and/or raise social awareness to the problems. Government force isn't needed to solve all issues and these solutions can work with a morally outstanding society, which is what I think we are both working towards.

Please let me know of any questions. Thanks.

[Origanalist]

Professor is spelled with one f. --The Etymologist


(See, I can be a dick too; just the like person who joins a forum and doesn't want to learn anything.)

I always thought it was spelled perfessers.

[Cutlerzzz]

People in this thread believe that trading with poorer countries creates more economic growth than trading with wealthier advanced countries. That trading with Victorian Britain, the Roman Empire, and Nigeria would be more advantageous and create more growth than trading with the Jetsons and Futurama.

[Barrex]

I come here to read what "other" people think and you scare them away.
http://images4.fanpop.com/image/photos/24000000/Screw-You-Guys-I-m-Going-Back-to-the-Homepage-south-park-24093503-500-203.png

You are the reason I dont have new members on this forum to mess with.:toady:

[Carson]

Back then everyone had to spend real money. We didn't have a bunch of leaches printing up what ever amount of cash it takes to get their way.

Look around at how some dress now.

When people had ideas they wanted help from the government with they had to sell the public. They've gone way beyond that now by being able to sell people, to go along, by starting in on them when they are four(?).

I'm not sure if they are going to making sure everyone gets another four years in their indoctrination centers because they want to condition people in to things like taking it the rear or because the central banks are behind it because they make money every time we whip something else on the credit card.

As soon as the public gets a say in the way THEIR assets are used as collateral, some intelligent decisions on the direction of the country will return.

[Carson]

Back in the fifties we didn't have much.

As kids we had the grass out back worn down to dirt.

We didn't have all the stuff but we did have things like respect. Respect for ourselves and each other. The Nation was strong. Sure we had a lot of people missing legs and arms and stuff from World War Two but even they were still fighters. We stood united.

Today the counterfeiters have us looted down to dirt. Not just are are personal possessions mortgaged but it seems everything we once held in public trust has been looted.

We had a chance a few years ago at electing Ron Paul and getting ourselves back on the right track. We could have brought the troops home and started them working with the public to get some home front defenses set up.

If we don't regain control of our government the world is going to come in and do it for us.

[helmuth_hubener]

If we would just raise the tax rate to 91% again, then we, too, would have our economy booming.

And not just on a few people -- it will not have nearly as great an effect if only applied to the very few. How about everyone making more than $100,000 per year? We will boom as never before!