TPS

Doesn't anyone here on the right understand the need to look at the Debt/income ratio? Debt/Asset ratio? Interest expense ratio?

I always get a kick out of conservative arguments that are impossible to verify with data.

If I'm counted as a "lib," I didn't make a moral argument. Though, the level of inequality in this country is immoral...

Firms treat those just like any other cost, and pass them along in prices as you imply. These make it more difficult on smaller businesses than large. As I've said about regulations in general, they act to make small business less competitive because they can't distribute the costs like larger companies can. Regardless, the share of profits in the economy has increased, and the wage share has decreased.

In addition, this is not simply about reducing poverty, it's also trying to remedy the rise in inequality that's a result of policies that began in the 1980s. Policies that de-regulated finance (and other industries) and increased globalization shifted power in favor of capital over labor, profits over wages. As I stated in my last post on this topic, workers' bargaining power has been decimated, so all of the gains from productivity have gone to capital. This generates a "demand gap" over time, because even though we are able to produce more, workers' earnings are stagnant. Some results from this over time: the US has the worst inequality among the advanced economies; workers/households increased reliance on debt to maintain living standards; an economy prone to asset bubbles and speculation as the more money that goes to the top means more money searching for financial investment outlets. The end result of these policies was an accumulation of private sector debt = 300% of GDP, which exceeded the 240% level in 1929. The private sector debt ratio was relatively stable around 120% of GDP from 1960-1980, then began a steady rise to the peak of 300% in 2008.This rise in private sector debt "masked" the underlying long term weaknesses in the economy caused by the shift of income from wages to profits. Conclusion: you can't fix this problem by continuing the policies that try to raise profits without raising demand for products. An increase in the minimum wage is one way to raise all wages relative to profits. It may not be the best way, but it's definitely needed in an economy where the main problem is demand, not supply.

i think he wants something NOT from PPP. Unless you want to argue about that?Try this J: http://people.stern.nyu.edu/nroubini/SUPPLY.HTM From dr. Dooms teaching web site. Includes links to both sides for further reading.

your basic idea is sound. Proponents argue that the income effect tends to be slightly greater than the cost/price effect, so there's a net gain in jobs over time. The more important issue is that it will tend to raise all wages since the floor is higher. It's needed because labor has been given the shaft for the past 30 years, as all productivity gains have gone mainly to capital and profits, leading to the rise in inequality. Graphs like those contained in the link below tell the story. Despite the constant efforts on the right to push "supply-side" profit-led growth strategies, the current problem is a lack of demand, not profitability. If the government pursued a full employment policy, workers would have greater bargaining power, and the forced increase in wages wouldn't be as necessary. http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/17/higher-productivity-used-to-mean-higher-wages-has-that-broken-down/

The Bush deficits were caused by both tax cuts and increased spending. I was focusing on the contribution to each deficit from the revenue side. You can do the same for the spending side. No article off the top of my head. I'll do a little search when I have some time. One way to correct for any issues there, focus on the IRS data and average tax rate paid out of AGI (adjustable gross income).Avg rate = taxes paid/AGI. This measures the average tax paid regardless of employment level. That rate will change from either a change in the amount of income in each marginal bracket (eg rising inequality raises the avg tax rate), or a change in rates. The average from 1993-2000 was 14.3%; the average from 2001-2008 was 12.7%. Both periods saw income shifting to the top by 5-6% of total AGI, so the drop in the average can be attributed to the drop in rates. The average difference over the period is 1.6%, which is a little better than the 2% average from using the "official" unemployment number.

hey, you can read his stuff on wiki, or so he says...

welcome to the world of economics...Full employment is defined by most economists as a level of "unemployment" consistent with stable inflation, the so-called "non-accelerating inflation rate of unemployment", NAIRU. If that level is 5%, then full employment is defined at 95% employed, so the actual level of employment can be "less than, equal to, or greater than" full employment.

yes, true, if we made everyone a CEO imagine all of the bad behavior...

why didn't I think of that solution! If everyone simply improved themselves then everyone wouldn't need to have a minimum wage job. If everyone were rich, then we wouldn't have any poor. Maybe we could solve all of our problems by making everyone a CEO? Geez, this simple...

That's an easy one, they vote for dems because the dems give them $. Unlike the 1% who vote for the reps because they give them $.

I thought I answered it in this thread, maybe not well, but it's in here somewhere... SSers argued that tax cuts would increase growth so much that they would eventually pay for themselves and balance the budget. Keynesians say SS policy is simply Keynesian policy of using increased deficits to expand the economy, but that lowering tax rates will increase the government's "full employment" or structural deficit over the cycle. Keynesians argue that if you permanently cut taxes or permanently increase spending, there will be a change in the structural deficit. Now the only way that one can evaluate different fiscal policies is at the same stage of a business cycle. As 3rdtard would say, it's not fair to compare revenues in 2001 to revenues in 2000 because 911 caused the economy to slow. Bush also raised spending after 911, and there was a housing bubble, so what was the ultimate source of growth and therefore revenues? All. So, the only way to evaluate the impact of a change in tax regimes is to look at the % of revenues generated at similar stages of the economy. The best way is to compare is to evaluate different tax regimes at what we would consider full employment, or equivalent stages of the business cycle. Are the lower tax rates generating an equivalent amount of revenue as the previous tax rate regime. Again, the only way is compare if we are generating more taxes our of a given level of income or not--%s. Here are three points of comparison between the 1990s and 2000s: 1994/2003; unemployment rates 6.1/6.0; revenues as % of income collected 18/16.2 1995/2004; U=5.6/5.5; revenues = 18.5/16.1 1998/2007; U=4.5/4.6; revenues = 19.9/17.6 As we all know the government was running a surplus before the tax cuts, in fact even during 2001 there was a surplus. The Bush tax cuts and increased spending on wars were very expansionary, but they increased the structural deficit by an average of 2%/year of GDP over his tenure. Conclusion: cutting taxes are a good way to expand the economy at less than full employment--any Keynesian will tell you that; but don't close your eyes to the fact that those tax cuts won't increase deficits over time.

That is precisely how tax (and spending) policy should be configured--taxes should decline when we're at less than full employment and rise when inflation increases beyond what's deemed generally acceptable (and not just by finance... ;-)

I'm not sure about CA, but NY's increase excludes workers making tips, unless adding average hourly tips to an hourly wage is < the minimum. Cooks at any decent restaurant will make more than the minimum. The only part of a restaurant's workforce impacted are the dishwashers...

Fixed to include the PPP majority...

Well, really about the opening analogy... http://www.commondreams.org/view/2013/12/09-0

Yep

I don't think you will find too many economists who would say that an increase to $15 over a short time period would be a wise thing. I think California is doing it right, incrementally increasing over the next 2 years from $8 to $10.

Why did you say this then?

you are too stupid to figure it out.

one more try...Suppose the US government spends $3 trillion annually and Finland's government spends $1 trillion annually, which one is bigger and more influential on its economy?

It's not called "Laborism." Capital makes the rules, because capital rules.

Ive already said that bigger deficits boost the economy. That can happen from tax cuts or spending increases. Yes to Q1.Yes to Q2, and yes to Q3. Which is precisely why you need to compare tax changes for similar levels of unemployment. You can only compare different tax regimes at similar stages of the economy! If you want to argue that lower tax rates caused faster growth, there were only 2 out of 8 years for bush where the growth rate was greater than the long run average. The average growth for bush over his 8 years was worse than any president sinCe ww2, though Obama is on track to break his record. The reason you use a % figure for the size of G is to account for population growth and inflation.