There is also a worry on another score: call it the “fiscal capacity charge.” Some economists and businesspeople fear that boosting already high tax rates in the hope of raising the money needed for substantial poverty reduction would fail to collect much more revenue. Revenue might even be lost as taxpayers cut back their supply of labor and companies lose interest in increasing their efficiency. Yet there is not a shred of academic evidence showing that Western economies – and certainly not the low-tax US economy – have reached the limits of their fiscal capacity.]
This is easy, California crowding out the economy. It took us two extra years to recover from California's fiscal squeeze. And we are seeing the problem in four recessions in a row. If Phelps would like, I can chronicle the collapse of retail banking, the rise in credit card rates, and the Fed taxes. Who pays those Fed taxes? Note those gray bars? Aligned with presidential regime change, and that is crowding out.
Phelps starts with a prior, then he and his crowd make sure they do not look at any contradictions. His crowd will say we can easily bailout Cal pensions, but will they bail out the small energy states which are going under? No. Phelps is a BS flat earther, as opposed to the just ignorant flat earther. I say it is time to fire the whole bunch of the mathematically ignorant economists.
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