Relevant and even prescient commentary on news, politics and the economy.

GDP Growth Caused By Tax Cuts Has Never Happened

Mike’s post here got me thinking.  I’ll telegraph my conclusion.  He dramatically understated his case. You can see the long range view of nominal and inflation adjusted GPD growth in Graph 1 of FRED quarterly YoY percent change data. Graph 1 YoY growth Nominal and Inflation Adjusted GDP Nominal GDP Growth was in a secular […]

Debt and Growth

Art at The New Arthurian Economics and I are looking at the relationship between debt and economic growth.  Art started with an observation of two FRED series, total credit market debt owed (TCMDO) and Gross Domestic Product (GDP,  nominal or GDPC1, inflation adjusted – take your pick.) Graph 1, from FRED, shows these data series.  […]

Strategic Lying as Political Art

If you listen to Randi Rhodes, you know she is still livid over Romney being declared the “winner” in last week’s – we’ll call it a “debate” for the nonce. Alas, though, the reason he won is that poll numbers have moved in his favor.  Whether that bounce is robust remains to be seen.  But […]

The Effect of Capital Gains Tax on Investment – Appendix

In comments to my previous post, Robert requested the unsmoothed data from Graph 3.  Here it is.   GPDI is plotted against the Capital Gains Tax Rate. Since the Capital Gains Tax Rate (X-axis) is quantized, the result is columns of data.  Compared to the smoothed version, there is little change in either the slope or […]

The Effect of Capital Gains Tax on Investment

Matt Yglesias, servitor to our corporate overlords, suggests that the reduced capital gains tax rate paid by rentiers like Willard Romney is really a very, very good thing.  To wit: The main reason Romney’s effective rate is so low is that the American tax code contains a lot of preferences for investment income over labor […]

What is the Economic Middle Class?

My lovely wife shared this link with me on Facebook.  I got into a discussion in comments there with a right winger who suggested that $250,000 was a very reasonable estimate for median income in Boston. As it turns out, median household income in Boston is $51,914, close to the national average, and way below […]

Public and Private Investment

One not particularly cute graph; no analysis, explanation, nor editorializing. GDPI is gross domestic private investment. NDGIC96 is Real Federal Nondefense Gross Investment. SLINVC96 is Real State & Local Government Gross Investment. Source page at FRED. Note that private investment runs at about 7 times the total of government investment at all levels. Make of […]

Yes, The Right Wing Lies When They Say Obama is a Profligate Spender

Part III – How to think about time series data. For reference:Part II  Federal Spending as a Fraction of GDP Part I  Federal Spending Growth Some commentors to the previous posts have rightly concluded that I consider spending under Obama in the context of historical trends.  In fact, if you don’t consider historical trends, you […]