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Should the highest rate of income tax be raised to 50% Watch

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    (Original post by Rakas21)
    An answer to a different question. The US had seen a Greek like depression coupled with a slice of the monetary supply actually falling because the banks were not bailed during the Great Depression. What this did is create a massive amount of spare capacity which meant that FDR could use massive levels of stimulus.

    Although its a step in the right direction i don't believe it can be replicated in the UK or US today due to the fact that equilibrium employment is much higher than those days (due to attitudes to women, disability, part time work ect..).

    One of the dangers cited by some regarding Trump's plans for a ~10% GDP stimulus is that because the unemployment and underemployment level is relatively low and this approach has not been tried in normal times for several decades that we say a hefty inflationary effect which of course demands interest rate increases and potential problems for mortgage owners.

    To make it clear, I do support much higher capital spending levels and am not rubbishing FDR however i feel its important to point out the context in that we do not have the spare capacity that the US did in the 30's.
    And economies are now much more open. High tariffs were common in the 1930's.
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    (Original post by heri2rs)
    Bush did not have to bail out the banks. Not only was it an incredible waste of money, but also immoral. Why should banks that fail (although not entirely their fault) be bailed out. If they cant compete with other banks in the market without failing, then they deserve to fail. It is immoral because small banks that don't take risks can never prosper. It is also illogical to guarantee bailouts because then banks will take more risks, causing more crashes.

    Bailouts also land us in huge debt. You either have to use taxpayer money, print or borrow. You either make cuts which will anger the electorate - or increase taxes which cripples the economy and will anger the electorate.

    You could borrow money but from whom? Nobody will lend any money because the government credit rating takes a hit, and this only means the burden of having to repay this money with interest will fall on the next generation (us).

    You could print it like the Federal reserve did, but that also needs to be payed back with interest (thanks to the Rothschild central banking cartel). This also causes inflation and robs the little man of their savings.
    People think that the growth in the stock market is down to economic growth. Untrue to say the least, Last year, America managed 1% growth. How can the value of stock rise if their is less economic growth? If you line the pockets of banks with worthless FIAT money from QE, then demand for stock increases, and their prices increase - and people will rush to invest again. What happens when there's monetary contraction? As I mentioned in my previous post, economic interventionism is cancer
    Didn't deregulation cause 2008 , whats your view on this?
    Do you support austerity or are you a right wing Keynesian ?( reganomics)
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    (Original post by heri2rs)
    Whilst I still think it is theft, I think a little taxation - through tariffs and sales tax is a necessary evil, to pay for the military and police. Other than that, the free market can always find a way to give people the things they want.


    This wasn't directed at me but:

    In the 1920's, only the top 2% percent of earners payed any income tax in America thanks to Calvin Coolidge (Greatest president ever). This was a time when the economy was booming and many people in rural areas first had access to electricity - Thanks to the free market. The 40 hour work week was introduced by Henry Ford to attract the best workers - thanks to the free market. Everybody - even the proletariat, could buy vehicles and consumer products like washing machines, radios etc.

    And before you say that the economy crashed as a result of this, you'll want to learn about the plague that is central banking. The federal reserve vastly expanded its money supply in the 20's making credit cheap. This encouraged people to take out loans to invest. There's nothing wrong with this, except that the fed kept inflating the supply so that when it did pull back on credit expansion, prices tanked by 35%, stocks crashed and everybody rushed to sell. The crash of '29 was never really the cause of the Depression, but indeed the response.

    A common misconception is that Herbert Hoover was a traditional republican 'do nothing' president, when in fact, he was a known economic interventionist so much so, that his predeccesor, Calvin Coolidge an actual 'do nothing' president though he was an incompetent choice - and rightly so. FDR actually ran as the 'do nothing' candidate, to the right of Herbert Hoover in 1932.

    I'll leave the link to the bulletin at the end;
    'The Fed made further errors that helped put the economy back into recession in 1938. Meanwhile, a flood of bank failures in the early 1930s compounded the money supply shrinkage and heightened economic fears. A key problem was that most states restricted bank branching, which prevented banks from diversifying their portfolios across jurisdictions.By contrast, Canada allowed
    nationwide branching and did not suffer a single bank failure during the Depression.'

    'The Depression was a uniquely severe contraction. Real gross domestic product fell for four years before finally beginning to recover.3 Real output only regained its 1929 level in 1936, but then output plunged again in 1938. The unemployment rate stayed persistently high at more than 14 percent for 10 years (1931 to 1940).4 By contrast, the economy recovered rapidly after a sharp contraction in 1921. Real output fell 9 percent in 1921 and unemployment rose to 11.7 percent.5 But the economy bounced back with output recovering all its lost ground in 1922. Unemployment fell to 6.7 percent in 1922 and 2.4 percent in 1923. The secret to the quick recovery was that the government generally stood aside and let the market recover by itself—wages and prices adjusted, resources shifted to new areas of growth, profits recovered, business optimism returned, and investment rose.'

    This refers to the conveniently named 'forgotten depression' of 1919-1921. Production had contracted by 33%, compared to 27% in the Great Depression. The response however by Woodrow Wilson (the tyrant who gave us the Fed) and Warren Harding was completely different. They sat back and did nothing. The implemented huge tax cuts and the economy quickly recovered.

    Herbert Hoover however engaged in a typical Keynesian response by starting huge infrastructure projects, most notably the Hoover Dam. He imposed protectionist tariffs through the Smoot-Hawley act, further stifling world trade, which had also contracted to a third of levels prior to 1929.

    I could go on about the New Deal in detail but then it would become an essay

    https://object.cato.org/sites/cato.o...bb-0508-25.pdf
    It would be interesting to see Bornblue and DMcGovern response to this! It should make a good debate , .
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    (Original post by fleky6910)
    Didn't deregulation cause 2008 , whats your view on this?
    Do you support austerity or are you a right wing Keynesian ?( reganomics)
    I support austerity. Government should only spend on things that will protect our basic rights (by rights I mean life, liberty, freedom of expression etc) from internal and external threats.

    I may be wrong but I dont think it was down to deregulation. The Great Recession of 2008 was caused by a housing bubble. Banks gave out mortgages to people who couldn't pay off their mortgages. However banks set their own standards in a free market, they don't give loans or mortgages to people who wont pay them back. This is where the Bill Clinton administration comes in. They, in the name of giving minorities and poor people their own homes, forced mortgage providers like Fannie Mae and Freddie Mac, to loosen their lending standards. Everybody gets loans, demand for housing increases, house prices increase and like every bubble, it has to burst. The white house in 2004 if I'm not mistaken did warn everyone about mortgage providers.

    Numerous economists(all to the right) predicted this (notably the Chicago and Austrian schools of thought). Of course, they were all laughed off by establishment Keynesian stooges like Paul Krugman.
 
 
 
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