Republican proposes Balanced Budget Amendment

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Yeaahhh sorry there was a little word confusion on my part. I should've said purchases instead of investments. Investments have a return, purchases are simply buying things.

And yes, I believe in supply side economics, I just don't like the way Reagan did it. I don't believe in tax cuts for the rich nor do I believe in having small government fiscally and big government socially. Progressive taxing does trickles down to small businesses that buy from big businesses, but by giving the rich tax cuts how do you know whether they'll invest or purchase? It's not going to trickle down if all they're doing is purchasing.

Plus the biggest thing holding the poor down is the culture of poverty which is a dysfunctional system of values. Poor impulse control, low tolerance for frustration, poor emotional control, fatalism, and self-indulgence are common traits of lower class values. Self restraint and emotional control are crucial for education and are typical middle class values. So saying education or throwing money at people will solve poverty is naive since that is usually said under the assumption of lower class values being the same as middle class values. How can you possibly tell someone the value of education if it has no immediate application or use to em? You must work from the bottom-up, not top-down.

The misconception there is on both sides is that either the poor are being held down by anything but a system of values or all it takes is the smell of coffee. Yes one can rise above these values, but these are paradigms you are talking about, so there is a lot of inertia involved and it is a slow and gradual process. Social programs should aim to eliminate these system of values, not just hand things out and expecting education to be the only solution to poverty.

Also there is a lack of role models when it comes to education as well as less people personally knowing those who have used education to successfully pursue their goals.

That completely debunks the myth of the poor just waiting for the pressure to be taken off of em so they could go on to be successful in education. Empirical data of a bunch of numbers and "basic common sense" (which is a can of s**t worms and isn't as universal or objective as the connotations make it out to be} doesn't mean s**t if the problem lies in unwritten rules and social class values. I hate when people use the word "common sense" in politics as if it's some objective standard that's supposed to make sense out of the complicated nature of politics.

Prices tend to lag inflation a little bit, so that's not a huge issue. If you were going to try to make a case, you should argue that wages will also lag inflation, or, like AG, point out that creditors and financial institutions will adjust their policies to account for expected inflation.


I'm not sure what relevance this random victim-blaming rant has to anything that was previously being discussed.

Orwell, just because I don't want to quote you, I referenced both wages lagging and financial institutions not lagging much.

I suppose for you though, AceOfSpades, the real question is what is meant by "Supply Side economics". Mainstream economics is fine with the idea of promoting saving, even promoting saving as promoting economic growth in the long-term, as such, a perfectly mainstream economist could argue against capital gains taxes and/or other things because of the negative impact on investment rates. Often times though, supply side economics is associated with income tax cuts, which are really a very problematic direction, because cutting income taxes can go either way in promoting work. (You can get more money per your effort, and thus work harder, or you can work less knowing that the little effort you put in is sufficient)


Orwell, AceOfSpades actually has a point that some researchers have actually taken:

http://econlog.econlib.org/archives/200 ... _poor.html (has a research article in a word document arguing that the poor are more irrational than other groups, and thus possibly less helped by the welfare state)

(Also, please note, Orwell, I am not saying that this view is the most correct, only that we/you cannot outright dismiss AceOfSpades)

I was dismissive of it less because of objections with the substance of what he was saying there, and more because it just seemed completely unrelated to the ongoing conversation and seemed to be a way to derail the discussion off in a completely different direction. I mean... I don't see any rational way of arguing that a progressive taxation system can hurt the poor. Now, it is possible to argue about the effects of inflation given that large financial institutions are more likely to satisfy the rational expectations hypothesis than minimum-wage workers are, and it is possible to argue about any given welfare program. But a progressive tax (taken as an alternative to a flat tax or a regressive tax) unambiguously favors the poor.

Ah, I understand your objection, and it is valid. Welfare was not the topic in the matter of tax policy.

@ Orwell: Victim blaming rant my ass. It doesn't fall under either extremes of just-world fallacies or complete absolving of all responsibility. And yes the fact that the impact of social class values are ignored by the underlying assumptions behind social programs is relevant to this thread since redistribution of wealth isn't needed to accomplish a change in social class values. The poor need to be autonomous, not dependent. When I say "hurting the poor", I mean that it's more geared towards sustaining em than social mobility.

I dunno about wages lagging inflation at large (including debtors, creditors, financial institutions, businesses, etc.), but lower minimum wage definitely causes inventory to be cheaper in a small business. He has a good point about cognitive biases though, and it definitely sounds plausible.

@ AG: I've been getting a bunch of confusing definitions of supply side economics, some of which are saying reduced regulations on the economy and others saying tax cuts for the rich and trickle down economics. I'm just in favour of small government on the fiscal and social side of things, and I don't believe in tax cuts or progressive taxes. You have a good point on incentives, but the thing is money isn't usually the only motivation. Most people choose jobs they like and there's some intrinsic motivation involved. It's not exactly that the poor are more irrational, but that their value system is more dysfunctional.

I am not surprised. "Supply side economics" is mostly a political term, not a term within academics, so the usage of it falls on political lines.

Money is not the only motivation.

I am not sure about the distinction between economic irrationality and dysfunctional values. I suppose one could make it that "dysfunctional values are economically legitimate, but they are in conflict with the ideal values, such as progress, self-improvement, and perhaps even happiness", but that kind of direction is always a more difficult direction to argue as one has to justify the label more.

Whatever. It's still unrelated to the issues of whether progressive taxation and inflation are beneficial or detrimental to the poor.


There are loopholes in the minimum wage laws for small businesses who need unskilled labor. I once had a job that paid less than minimum wage. But anyways, the data don't really agree with you here. Minimum wage increases do not decrease employment so simply. To some extent the increased cost is absorbed by the employer, and to some extent it is passed on to the customer. There is not a lot of convincing evidence for claiming that minimum wage increases end up hurting low-wage workers that significantly.


In the context of political discussions, "supply-side economics" refers to the right-wing voodoo crankery whereby all ills are cured by tax cuts.

I don't think you actually understand what a progressive tax is. If you don't believe in either tax cuts or progressive taxes, then you would have to support large tax hikes on the poor. That certainly does not help anyone, least of all the poor.