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Economic Sense

RSS By: Matt Bogard, AgWeb.com

Matt's primary interest is in the biotech industry and ag policy.

The Economy, Corn, & the Supreme Court

Jun 29, 2010
By Matt Bogard

Just some random thoughts….

Instead of praising the miracle of capitalism, technology, and hard work for being able to feed so many people in so many ways with corn, while minimizing environmental impact, why do so many activists push an agenda attacking family corn farmers?

This past week I’ve seen several articles (including Paul Krugman) with economists and commentators worrying about what we are going to do about the economy. The stimulus has failed as predicted by some of the world’s most prominent economists, and now politicians on both sides of the isle are concerned about deficits. All these commentators are setting up a false choice, they say we can have more stimuli but that means more debt and little bang for our buck, and that means less business confidence and slow growth. They are right, but they are stubbornly ignoring the obvious solution.  As we saw in the 80’s and 2000’s cutting top marginal tax rates, cutting capital gains taxes, and cutting corporate income taxes will give us increased revenue to solve the deficit problem, and incentivize economic growth. Unfortunately these people can’t see past their ideology, and are determined to recreate the 1930’s. (of course it was the misunderstanding of the Great Depression  and the New Deal that sent us down the wrong road in economic policy, and it took us 60 years to figure it out).

Last post I talked about proposed taxes on free speech. Now there is a proposal in the Senate that clarifies existing powers that the president can use to shut down the internet for up to 4 months (CNET News)  That might come in handy around election time. I would think this would have bi-partisan support. This week we also saw a 5-4 decisions upholding the existence of the 2nd Amendment. Some commentator lamented that that was really close for such a basic human right, and what if it had been the 1st Amendment in question? Given proposed speech taxes and possible internet shutdowns it wouldn’t be surprising to see a 5-4 vote on our basic right to free speech.

Speaking of supreme court issues, from the hearings  (via YouTube) on Supreme Court nominee Elana Kagan, either she doesn’t understand the commerce clause ( see  Regulating Commerce Agricultural History for more) or she reserves the right for the government to tell farmers what kind of food to grow and consumers what they can and can’t eat. That seems to open the door to food fascism.  

The ignorance of political leaders, commentators, and many academics is amazing.  I’ll end with a quote from a great economist, Murray Rothbard:

 "It is no crime to be ignorant of economics, which is, after all, a specialized discipline and one that most people consider to be a 'dismal science.' But it is totally irresponsible to have a loud and vociferous opinion on economic subjects while remaining in this state of ignorance."

Murray Rothbard, Making Economic Sense (1995)

 
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COMMENTS (4 Comments)

Matt Bogard
You guys make great points, and don't forget, under the marginal tax cuts of the 2000's, we actually saw a 25% surge in tax revenues coming into government because it incentivized so much more economic activity. (that's the largest 3 yr increase in revenues since the 60's). The wealthy paid more in total taxes than anytime in history, but overall a lower % of their individual incomes. And, actually, the deficit as a % of GDP was almost cut in half. Still,in the early 2000's we managed to bounce a few checks and that created some deficits, but that's a far cry from the path to bankruptcy we could be on now if we don't turn the economy around. History and economics indicates that more or sustained marginal tax cuts are better policy for reducing the deficit and promoting growth than the currently scheduled tax increases on 1000's of farms and small businesses (when the tax cuts from the early 2000's expire) and more stimulus spending.
6:44 PM Jul 1st
 
Anonymous
Anyone with any intelligence knows that the only reason that the government was taking in any money when Clinton was in office was because he was running the country so poorly that the stock market was dropping so much that people were selling their stock to not loose all of their gains, generating capital gains taxes on the sale of the stocks. Under President Bush people did not need to sell their stocks to save their investments, because the stocks were rising in value, so the tax income went down. Also under Clinton, the dumb represenatives and senators saw all the money coming in, which was a one time thing, and spent it several times before it had even come in.
2:13 PM Jul 1st
 
 
 
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