Thursday, December 8, 2016

Art Laffer: Trump Tax Cuts Will Bring Economic 'Nirvana'


Article says same-o same-o on trickle down... blah blah blah...

One key difference is Trump's vs. Reagan's view on tariffs wrt those tax effects on the external balance result.

And this is revealing from Laffer the article says:

 Laffer, a former member of Reagan's Economic Policy Advisory Board, told the Financial Times that Trump should not worry about America's growing trade deficit,

But yet at the same time he is claiming that the govt deficit will be under control via increased tax revenues if we adjust the tax rates to some optimum rate.

You can't say that because the two balances are included in the NIA accounting identity so actually all three balances matter including the external balance.

So Laffer manifestly remains operatively ignorant of the NIA framework.  All of these economists should have to go back and take Accounting 101 and Accounting 102 and I think that would probably fix them.

This is from the Accounting 101 syllabus at Wharton and is what these people have never been trained in and thus makes them currently unqualified:

The course adopts a decision-maker perspective of accounting by emphasizing the relation between accounting data and the underlying economic events that generated them.
They don't have the cognitive ability to look at an economic event and THEN accurately create the ex post accounting records that document those economic events.  They have never been trained in doing this activity so they remain ignorant in this area.  They just can't do it.








8 comments:

Noah Way said...

Nirvana for (corporate) welfare queens.

Michael Norman said...

I don't know whether to laugh, cry or throw up every time I see Stephen Moore give a TV interview. Resurrecting the same, old, trickle down shit.

Matt Franko said...

Well its different this time as Trump has his attention on the external balance and immigration control... whereas in the past the right-libertarians ignored the external sector and didnt want to regulate the system inflows of unskilled workers... remain mired in their gold standard thinking, etc...

MRW said...

You can't say that because the two balances are included in the NIA accounting identity so actually all three balances matter including the external balance.

Matt, where can I get more info about the NIA accounting identity?

Matthew Franko said...

MRW here is a start:

https://en.wikipedia.org/wiki/National_Income_and_Product_Accounts

and from this the MMT people (among others) derive the Sectoral Balances Equation which is here:

https://en.wikipedia.org/wiki/Sectoral_balances

But it looks like you also need some sort of foundational grounding in the Accounting Science in order to OPERATIONALLY understand these approaches...

Laffer doesnt have that... ie unqualified...

MRW said...

Matt, I know all that. But you should see some of the explanations on Wiki. they're full of Friedman and Krugman's explanations. eg Savings eplanations.

I mainly asked because you should add these links for the general record here, rather than dumping acronyms and references a newbie can't understand at first and then finds inaccurate info in an effort to understand what your often cryptic explanations mean. In other words (IOW) assume you are teaching at the same time. Your opinions are valuable. Just think you should honor them as such. :-)

OK. I'm saying: take more care. This isn't a criticism. Just honor what you know.

MRW said...

And don't assume everyone else does.

Matt Franko said...

Then you have to visit here more often... ;)

It's an approach I use to try to get folks to follow along rather than write every post to be all inclusive....

I've been here a long time and have grown to consider this an online community and don't want to "dumb it down" for regular readers and also hope this familiar style might draw the right kind of people in who are very interested in knowing more about what we talk about...

So there is a bit of method to the madness.... ;)