Timeline for Relationship between taxation, national debt, and pool of private investment money
Current License: CC BY-SA 4.0
4 events
| when toggle format | what | by | license | comment | |
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| Sep 10, 2021 at 15:27 | comment | added | SystemTheory | The key to understanding normative political judgment in economics is recognizing what any person thinks government should or should not do to cause the economic good. Kalecki argues that a gov't deficit can be used to produce full employment and a flat capital tax on both financial wealth and real wealth will be sufficient to pay the interest on the national debt without distorting the incentives to invest. But gov't policy must not cause rampant inflation. All economic theories are matters of logic applied to social institutions with some assumptions about behavior of agents in the context. | |
| Sep 10, 2021 at 15:16 | comment | added | SystemTheory | The essay describes real world relations between the national debt and banking system during World War 2 when the U.S. economy had full employment and low inflation due in part to price controls. The complexity added to some other economic models must be justified by additional assumptions, for example, that fiscal spending contribution to GDP will crowd out private sector spending. In reality profits in the private sector go up when the government runs a deficit under so-called stimulus policy. Ronald Reagan ran gov't deficits (Keynesian stimulus) and sold it as "supply side economics." | |
| Sep 10, 2021 at 11:58 | comment | added | scottef | Thank you. This note shows at least that my thought is not completely crazy, since it was shared by at least one competent economist at one time. I do worry that since it's 80 years old, and supported only by one reference to an earlier work of the same author, it might not be well supported, especially in light of some of the arguments & studies given by others above. Indeed, I now fear it is too intuitionistic and doesn't consider enough complexities of the issue in the real world. But it does at least succinctly describe my initial thoughts on this topic. | |
| Sep 9, 2021 at 19:25 | history | answered | SystemTheory | CC BY-SA 4.0 |