Taxes on the affluent should be increased.

For clarity, I'll address your arguments by paragraph. I'd like to ask, though, that you back up your assertions with sources. Paragraph 4 especially is quite difficult to respond to, so I'm going to withhold comment on the wage figures you cited until you can point out the source you took that information from. Paragraph 1: Raising interest rates is not a solution, especially with the economy as fragile as it is. It would shrink demand even further, and decimate the government's ability to deficit spend, thus forcing austerity (a good example of this is Greece, since it can't borrow in its own currency or print money). I didn't assert that zero-bound interest rates were the sole cause of hoarding, but rather a contributing factor (the most pertinent factor is lack of demand, coupled with the fact that investing in a bond when interest rates may soon rise is quite risky). Also, purchasing an asset--say, a security--is not the equivalent of purchasing a good (directly contributing to aggregate demand) because, as Paul Krugman points out, "the seller might put the cash in his mattress, or put it in a bank that adds to its reserves." That was actually the result of QE; there is so little demand that it is simply adding to excess reserves on bank balance sheets, hence why inflation right now is under two percent. Eliminating the Federal Reserve, though, is a radical idea: yes, it has made flaws (miscalculating economic growth, missing the housing bubble, lack of financial regulation under Greenspan and Bernanke, preemptive mini-taper, etc), but monetary policy will simply not set itself. Eliminating the Fed threatens the stability of the entire financial system. I never asserted that saving don't help the economy. I believe in the paradox of thrift: if everyone cuts back at the same time, the economy will collapse, so someone has to spend. That player has to be the government right now since demand is so low, and interest rates can't be lowered any further. Deleveraging may be good for a single family or a business, but the government cannot act as a family would. Krugman summarized this as "my spending is your income, your spending is my income." For a dollar to be earned, producing an incentive to work, it must be spent. But with less spending comes fewer jobs, and that leads to a vicious cycle of further layoffs, even less demand, et al. To say that the economy won't get perpetually worse is to say that it will self-correct. Keynes would respond, "in the long run, we are all dead--that is, we should do something now, rather than assuming that the economy will magically fix itself, that markets are perfect and efficient, that people are rational, etc.: the fact that lack of demand in the short-run can undermine the long-run position. Paragraph 2: Are you arguing that demand-side economics is inflationary? That"s simply inaccurate. There was mild inflation in the decades following WWII, which is what I support. If the economy were to pick up to the point that we were experiencing an inflationary gap, I"d support spending cuts and interest rate hikes to avoid runaway inflation. The example that's commonly used in reference to Say's Law is Ricardo"s Corn model: the notion of a closed circuit economy where workers are paid in corn"and literally eat the product of their labor"is the only place where Say"s Law is applicable. There are no possibilities of leakages or injections into the economy. The problem is this: the real economy is not closed-circuit, and the model excludes key institutions (finance, trade, government, and even the underground economy). It presupposes, again, that workers will contribute right back to the system (consuming what they created), but this is not the case. There is no reasonable expectation, in the face of a stagnating economy, that there will be demand for the products. Moreover, there is no explanation that there won't be an inefficiency in the short run--say, an embargo (such as the one that imposed by OPEC after US interference in the Yom Kippur War)--that undermines the long run position. Moreover, I noted in an earlier argument that executives are sitting on literally trillions in capital that they aren"t investing--in spite of the fact that taxes are so low--and that businesses, as well as Bernanke, the NBER, Bartlett, etc, agree that the problem today is lack of demand. Paragraph 3: This is strictly a matter of semantics. If a tax cut is a subsidy--and by the definition of a subsidy, a tax cut qualifies--then removing that break is raising taxes. Ron clearly doesn"t hate subsidies if he voted for oil breaks, so much so that he redefined the term subsidy to justify his vote. Is that not a vote for the misallocation of capital"giving an advantage to companies which are doing just fine? I challenged you to tell me what corporate welfare is, if oil breaks don"t qualify. You haven't done that. Tell me, also, why Ron Paul supports oil breaks, but sponsored a bill to eliminate several tax credits that benefit poor and middle class people. Also, I never called Bachmann or Ryan Libertarians. I said that Bachmann is a Tea Partier, and Ryan has been considered a Libertarian by many. You mentioned Tea Party and Libertarians, so I commented on both. You have the wrong idea of a "government-controlled" economy. I believe that markets should be as free as they can be, but that they are inherently flawed and can run amok if unregulated--it happened in the 1920s, in 2008, in the 1800s etc.--so the government needs to step in. I challenge you to point to a time in history (with sources) that a genuine laissez-faire economy prospered, and where wealth was shared to the extent that middle- and lower- income people weren"t dying on the streets. As for subsidies: I hardly think investing in research, or leveling the playing field through subsidies in renewable energy (which, by the way, have been cut recently) is the equivalent of supporting corporate welfare. It"s correcting a market failure: the fact that the private sector produces too much pollution, which contributions to climate change and threatens both the planet and the economy. Another market failure, of course, is that charities alone can't fix the problem of poverty. I support leveling the playing field--in equality of opportunity. Big oil companies are literally the most profitable in the world. Why do they need billions in tax breaks? Again, do you oppose them? Paragraph 4: As I said, none of this is sourced, so I"m only going to respond to this paragraph from "You talk about income inequality...[..]" down--though I will mention a few things: first, massive deflation didn"t begin until about the 1870s; second, tariffs were much more prominent during this period; third, your analysis has disregarded the five major economic panics of the 1800s, which we can discuss in the next round. As for income inequality, I don't think you could be more wrong. The US has worse income inequality than Western Europe and Canada, and just over the past 6 years, it has spiraled out of control. Moreover, 93% of the gains of the recovery went to the top 1 percent. Median wages stagnated for about three decades, despite massive productivity gains, and fallen since 2000. That's why food stamp expenditures have increased so heavily. You said that "countries with high levels of income inequality also have low amounts of poor people and better paid workers," but not only have you not backed this up, but you're ignoring the case study of the US. Paragraph 5: This is not sourced, and is rooted almost entirely in ideology. Provide proof that private roads can work. Provide proof that private schools outperform public schools--as the data (including an article I linked to) shows otherwise. Vouchers are inherently unfair, as they literally involved taking public dollars"defunding public schools--and subsidizing private, often parochial, schools. As for the "fairness" argument, let me say this: I don"t think it"s unfair to say to people who have never seen better stock portfolios, or better profits, to pay back into the system which enabled them to reach this level of success. What I do have a problem with is admitting, as you just have, that the rich are paying such low rates, and still asserting that they deserve more tax breaks, while, at the same time, attacking government, based on an ideology that you have not proven is the least bit pragmatic, and supporting a candidate (Ron Paul) who claims to believe that the government is flawed, yet votes to raise taxes on the middle- and lower- class. To do so, you have even redefined the word subsidy. And that is a fundamental difference between us. I don"t base my views on my ideology, or on the "size" of government. I look at facts, cite my sources, and look to ways to make the system more efficient. We've been trying trickle-down economics, and the U.S. case study proves that it is inherently flawed. You can't simply cut rates further and expect everyone to rise: the money has to come from somewhere; someone else has to pay for it. If you simply cut rates, we"ll have to implement austerity, and therefore poor and middle class people will pay for it. That's what Ron Paul wants. That's a view of government that, morally, I cannot accept, and it represents a model that has never worked. http://krugman.blogs.nytimes.com... http://actmedia.eu... http://www.nber.org... http://www.bostonglobe.com... http://www.theatlantic.com... http://www.huffingtonpost.com... http://history1800s.about.com...