Trickle down economics busted, Repubs nix report

[patches70]

In economics there is only reality,

That's pretty funny right there. Nice one!

[BigBallinStalin]

You all are right........let's just raise the tax rate to 75% on all income over $250,000 and 90% on all income over $1 million since there will be absolutely no negative effects on the economy.

Sucks when the facts don't go your way, huh?

To think that massive taxes on people has no impact on the economy is absolutely ludicrous.

On the contrary, the report generally showed that there was an impact on the economy by decreasing taxes for the wealthy. It was just the opposite of what Republicans are claiming.

At any rate, you go on thinking that your pet theory of how the economy works is the way it ought to be. In economics there is only reality,

Hahah, no there isn't. There really isn't. For most economists, reality is abstracted into models. For example, when they try to understand the top-income tax rate and capital gains tax on economic growth, they're making a lot of assumptions about reality. Furthermore, as already mentioned, there's the problem of omitted variables--among other problems. Then, we get into the economist's description of GDP, which may not be worth going into.

The point is that you should not be so easily led astray because you've been dazzled by a news report which summarized one econometric article. If you are so easily dazzled, then you should be aware of the possibility that you are letting your confirmation bias do the critical thinking for you.

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

[Metsfanmax]

Hahah, no there isn't. There really isn't. For most economists, reality is abstracted into models. For example, when they try to understand the top-income tax rate and capital gains tax on economic growth, they're making a lot of assumptions about reality. Furthermore, as already mentioned, there's the problem of omitted variables--among other problems. Then, we get into the economist's description of GDP, which may not be worth going into.

It is telling that you respond to my discussion about reality by talking about economic models. Models are one way to explain why economic reality is the way it is, but that doesn't change the fact that there is actually real data about the world, that the models are simply trying to paint a nice picture for.

[Symmetry]

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

Pretty much the basis of the thread- I can't give you the details because all we have is the conclusions and that it was suppressed for those conclusions. Don't be pissed off at me for telling you this.

[BigBallinStalin]

Hahah, no there isn't. There really isn't. For most economists, reality is abstracted into models. For example, when they try to understand the top-income tax rate and capital gains tax on economic growth, they're making a lot of assumptions about reality. Furthermore, as already mentioned, there's the problem of omitted variables--among other problems. Then, we get into the economist's description of GDP, which may not be worth going into.

It is telling that you respond to my discussion about reality by talking about economic models. Models are one way to explain why economic reality is the way it is, but that doesn't change the fact that there is actually real data about the world, that the models are simply trying to paint a nice picture for.

Well, it depends on which theory you'd like to subscribe. Shall it be Keynesian? Maybe post-Keynesian or neo-Keynesian? Shall we subscribe to the monetarists? Or maybe the real business cycle economists? How about the Austrians or the new institutional economists?

Which theory and set of models would you like to place onto reality?

The point is that you're wrong when you say, "In economics there is only reality." Just letting you know.

[BigBallinStalin]

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

Pretty much the basis of the thread- I can't give you the details because all we have is the conclusions and that it was suppressed for those conclusions. Don't be pissed off at me for telling you this.

You're not being very clear here. Are you saying that the newspaper is covering up the details? Why would you quote them?

You're really not making sense...

[Metsfanmax]

Well, it depends on which theory you'd like to subscribe. Shall it be Keynesian? Maybe post-Keynesian or neo-Keynesian? Shall we subscribe to the monetarists? Or maybe the real business cycle economists? How about the Austrians or the new institutional economists?

Which theory and set of models would you like to place onto reality?

The point is that you're wrong when you say, "In economics there is only reality." Just letting you know.

It seems that you are incapable of understanding that there exists a reality independent of which model you use to try and understand reality. This is not uncommon, but I hope you can correct it.

[Symmetry]

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

Pretty much the basis of the thread- I can't give you the details because all we have is the conclusions and that it was suppressed for those conclusions. Don't be pissed off at me for telling you this.

You're not being very clear here. Are you saying that the newspaper is covering up the details? Why would you quote them?

You're really not making sense...

I'm telling you that was a non-partisan report that said that lower tax rates on the wealthy produced no benefit on the economy, and it was suppressed by Republicans who didn't like what it implied.

I can't give you the details because it was suppressed. By the Republicans. It ain't me who wants to stop you seeing the details.

[Metsfanmax]

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

Pretty much the basis of the thread- I can't give you the details because all we have is the conclusions and that it was suppressed for those conclusions. Don't be pissed off at me for telling you this.

You're not being very clear here. Are you saying that the newspaper is covering up the details? Why would you quote them?

You're really not making sense...

I'm telling you that was a non-partisan report that said that lower tax rates on the wealthy produced no benefit on the economy, and it was suppressed by Republicans who didn't like what it implied.

I can't give you the details because it was suppressed. By the Republicans. It ain't me who wants to stop you seeing the details.

Did you even read the article you linked? The report is linked in the very first paragraph of the NY Times article.

[Funkyterrance]

Well, it depends on which theory you'd like to subscribe. Shall it be Keynesian? Maybe post-Keynesian or neo-Keynesian? Shall we subscribe to the monetarists? Or maybe the real business cycle economists? How about the Austrians or the new institutional economists?

Which theory and set of models would you like to place onto reality?

The point is that you're wrong when you say, "In economics there is only reality." Just letting you know.

It seems that you are incapable of understanding that there exists a reality independent of which model you use to try and understand reality. This is not uncommon, but I hope you can correct it.

I agree that there really is one reality, it's just not readily apparent. Models, statistics, they are all here to give us clues to what is actually happening.

[Metsfanmax]

Well, it depends on which theory you'd like to subscribe. Shall it be Keynesian? Maybe post-Keynesian or neo-Keynesian? Shall we subscribe to the monetarists? Or maybe the real business cycle economists? How about the Austrians or the new institutional economists?

Which theory and set of models would you like to place onto reality?

The point is that you're wrong when you say, "In economics there is only reality." Just letting you know.

It seems that you are incapable of understanding that there exists a reality independent of which model you use to try and understand reality. This is not uncommon, but I hope you can correct it.

I agree that there really is one reality, it's just not readily apparent. Models, statistics, they are all here to give us clues to what is actually happening.

Right, but people tend to get caught up too much in the models. Economics is a data driven science, similar in respects to many hard sciences. What makes or breaks an economic model is how well it explains the economic data we collect. We should judge Keynesian economics, for example, not based on our partisan views on the size of government but rather on whether it works. This is lost on many people, who think that they can be armchair economists because they have some (possibly rational) belief that doing X will cause Y. But what makes economics different from the hard sciences is that it's very hard to predict because it's built on a system of actors who are fundamentally irrational at best, even if sometimes they act in regular ways. So it is of crucial importance, when discussing economic models, to use the only data one actually has, to make economic forecasts.

People who say things like "lowering taxes for the wealthy spurs job growth" sounds logical on its face, but in a field like economics we cannot actually deduce the answer to this question in an intellectual masturbation session. We can only look back at history and see whether that is the case.

[Symmetry]

Presumably you're not ok with economic reports being suppressed by politicos either.

What do you mean?

Pretty much the basis of the thread- I can't give you the details because all we have is the conclusions and that it was suppressed for those conclusions. Don't be pissed off at me for telling you this.

You're not being very clear here. Are you saying that the newspaper is covering up the details? Why would you quote them?

You're really not making sense...

I'm telling you that was a non-partisan report that said that lower tax rates on the wealthy produced no benefit on the economy, and it was suppressed by Republicans who didn't like what it implied.

I can't give you the details because it was suppressed. By the Republicans. It ain't me who wants to stop you seeing the details.

Did you even read the article you linked? The report is linked in the very first paragraph of the NY Times article.

Yeah, I buggered up that post. A few too many beers. i have read the link and the report. Good catch, and thanks for paying attention.

[BigBallinStalin]

Well, it depends on which theory you'd like to subscribe. Shall it be Keynesian? Maybe post-Keynesian or neo-Keynesian? Shall we subscribe to the monetarists? Or maybe the real business cycle economists? How about the Austrians or the new institutional economists?

Which theory and set of models would you like to place onto reality?

The point is that you're wrong when you say, "In economics there is only reality." Just letting you know.

It seems that you are incapable of understanding that there exists a reality independent of which model you use to try and understand reality. This is not uncommon, but I hope you can correct it.

Again, to stress the point, in economics, there are multiple ways of construing reality. Depending on which theory or theories the economist subscribes, reality will be framed in a certain manner. If the theory is wrong or incorrect or inaccurate, it fails to meet your imagined claim, "in economics there is only reality." There clearly isn't. With economics, it is only a variety of constructed realities.

Go google the economists' view on rational choice theory, equilibrium models, etc. and read the assumptions made. You should be able to conclude that your claim is mistaken.

Everyone knows that economists strive to model reality in order to discuss it, but you've misled yourself. You view one website's short summary of one econometrics report, and throughout this thread, you expound upon its presumed validity--without even knowing how the data was collected and what the results really mean.

But, this does not matter, so long as you allow your confirmation bias rein free.

[thegreekdog]

MERGE!

viewtopic.php?f=8&t=180090

[Symmetry]

Everyone knows that economists strive to model reality in order to discuss it, but you've misled yourself.

Isn't that kind of the key- that this was a report taken out of circulation?

[Funkyterrance]

I think that if mets said "there is only one reality in economic theory" you could probably nab him but I don't think his statement that "in economics there is only one reality" is necessarily wrong. There are certain undeniable truths are there not?

[Metsfanmax]

Again, to stress the point, in economics, there are multiple ways of construing reality. Depending on which theory or theories the economist subscribes, reality will be framed in a certain manner. If the theory is wrong or incorrect or inaccurate, it fails to meet your imagined claim, "in economics there is only reality." There clearly isn't.

Yes. People make models to "construe" reality. I didn't argue that. That doesn't actually change the underlying reality. GDP was what it was in 2011 independent of whether you're a Keynesian or not. Your mistake is in assuming that you can't do economics without having a model to understand it. That's pure nonsense. You can collect data, establish trends, and make predictions without subscribing to any particular economic model. The models are useful for understanding why a certain trend occurs. If the model is wrong, the trend is still there.

Everyone knows that economists strive to model reality in order to discuss it, but you've misled yourself. You view one website's short summary of one econometrics report, and throughout this thread, you expound upon its presumed validity--without even knowing how the data was collected and what the results really mean.

I didn't say the report is valid (I even said at one point that I thought it was not good). I simply summarized the claims it made, and what conclusions it purports to achieve. I have not come to a personal conclusion on how taxation of the wealthy affects economic growth, but I've done enough science and read enough papers to be able to read a paper and summarize its conclusions.

[BigBallinStalin]

Again, to stress the point, in economics, there are multiple ways of construing reality. Depending on which theory or theories the economist subscribes, reality will be framed in a certain manner. If the theory is wrong or incorrect or inaccurate, it fails to meet your imagined claim, "in economics there is only reality." There clearly isn't.

Yes. People make models to "construe" reality. I didn't argue that.

So when you said, "in economics there is only reality," what did you mean?

That doesn't actually change the underlying reality. GDP was what it was in 2011 independent of whether you're a Keynesian or not. Your mistake is in assuming that you can't do economics without having a model to understand it.

Please find a quote where I assume: you can't do economics without having a model to understand it

That's pure nonsense. You can collect data, establish trends, and make predictions without subscribing to any particular economic model. The models are useful for understanding why a certain trend occurs. If the model is wrong, the trend is still there.

What's an economic model, Mets?

And what is the model's role in econometrics?

Everyone knows that economists strive to model reality in order to discuss it, but you've misled yourself. You view one website's short summary of one econometrics report, and throughout this thread, you expound upon its presumed validity--without even knowing how the data was collected and what the results really mean.

I didn't say the report is valid (I even said at one point that I thought it was not good). I simply summarized the claims it made, and what conclusions it purports to achieve. I have not come to a personal conclusion on how taxation of the wealthy affects economic growth, but I've done enough science and read enough papers to be able to read a paper and summarize its conclusions.

Okay.

[Metsfanmax]

So when you said, "in economics there is only reality," what did you mean?

I meant that there are economic facts (e.g. GDP, employment rate, taxation level, etc.) that simply exist. That is what economics is about. Anything else is a pretty picture that helps make understanding that reality better (actually this is arguable in the case of making economic predictions based on economic models, but that's more in the realm of policy and not pure science). That's true whenever you make a model.

Please find a quote where I assume: you can't do economics without having a model to understand it

Here you go:

With economics, it is only a variety of constructed realities.

That's pure nonsense. You can collect data, establish trends, and make predictions without subscribing to any particular economic model. The models are useful for understanding why a certain trend occurs. If the model is wrong, the trend is still there.

What's an economic model, Mets?

And what is the model's role in econometrics?

An economic model is a way of establishing the cause of those trends. This is actually not a subtle distinction, but it's one that many people overlook because it's hard for people to simply accept data without trying to understand why the data is what it is.

In other words, economic models (in the sense that you are talking about) play no role in econometrics. Now, economic models in the sense of making a purely empirical (e.g. mathematical) model of something are obviously the backbone of econometrics, but those should exist in a realm independent of what causes the empirical events that you are analyzing.

[BigBallinStalin]

So when you said, "in economics there is only reality," what did you mean?

I meant that there are economic facts (e.g. GDP, employment rate, taxation level, etc.) that simply exist. That is what economics is about. Anything else is a pretty picture that helps make understanding that reality better (actually this is arguable in the case of making economic predictions based on economic models, but that's more in the realm of policy and not pure science). That's true whenever you make a model.

Why are you leaving out theory, economic laws, models? Those are also what "economics is about."

Please find a quote where I assume: you can't do economics without having a model to understand it

Here you go:

With economics, it is only a variety of constructed realities.

How does that mean "you can't do economics without having a model to understand it."

What do you mean by 'do economics'?

That's pure nonsense. You can collect data, establish trends, and make predictions without subscribing to any particular economic model. The models are useful for understanding why a certain trend occurs. If the model is wrong, the trend is still there.

What's an economic model, Mets?

And what is the model's role in econometrics?

An economic model is a way of establishing the cause of those trends. This is actually not a subtle distinction, but it's one that many people overlook because it's hard for people to simply accept data without trying to understand why the data is what it is.

Without a model, how does the economist interpret data?

In other words, economic models (in the sense that you are talking about) play no role in econometrics. Now, economic models in the sense of making a purely empirical (e.g. mathematical) model of something are obviously the backbone of econometrics, but those should exist in a realm independent of what causes the empirical events that you are analyzing.

Sure, there is a difference between economic models and econometric models, but economic models are 'translated' into econometric models.

Earlier, you were stating "You can collect data, establish trends, and make predictions without subscribing to any particular economic model."

How does one even know what trends to make without models--or even without translating an economic model into an econometric model?

How can the economist made predictions without subscribing to any particular economic model?

[Symmetry]

BBS- do you think this should have been suppressed? I get that you disagree with it, but I also get the impression that you prefer stuff to be out in the open- to discuss the facts.

[Funkyterrance]

Earlier, you were stating "You can collect data, establish trends, and make predictions without subscribing to any particular economic model."

How does one even know what trends to make without models--or even without translating an economic model into an econometric model?

How can the economist made predictions without subscribing to any particular economic model?

Common Sense?

[BigBallinStalin]

BBS- do you think this should have been suppressed? I get that you disagree with it, but I also get the impression that you prefer stuff to be out in the open- to discuss the facts.

[thegreekdog]

To summarize my discussion in the thread I think this should be merged with:

(1) There are too many variables in economics to determine whether tax rates on the rich is a variable that causes (a key word) the economy to do better or worse. Therefore this study is worthless in an economic modelling context (in my opinion).

(2) The data shows two things: (a) as tax rates on the rich decrease, the rich take a bigger portion of the economic pie; (b) as tax rates on the rich decrase, the pie gets bigger.

(3) The conclusion states that as tax rates on the rich decrease, the rich take a bigger portion of the economic pie. That appears reasonable based on the data provided (which is limited - see (1)). The conclusion then states that as tax rates on the rich decrease, the pie does not get bigger. This appears unreasonable based on the data provided (which is limited - see (1)). It is further unreasonable because the author reasons for his conclusion basically say "I'm ignoring the data."

With respect to this thread in particular, I do believe there is a common sense element. If rich people have more money and pay less tax, they are more likely to invest that money in the economy in some way (either spending or investing) which will help the non-rich. If rich people don't have more money because they pay more tax, they are less likely to invest that money in the economy. But because there are so many other variables affecting the economy, this is not something data can prove or disprove, in my opinion.

[Symmetry]

Earlier, you were stating "You can collect data, establish trends, and make predictions without subscribing to any particular economic model."

How does one even know what trends to make without models--or even without translating an economic model into an econometric model?

How can the economist made predictions without subscribing to any particular economic model?

Common Sense?

Apparently he's drunk.