From: MEDELMA@cms.cc.wayne.edu (Michael Edelman)
Subject: Re: FAQ: The Record Thing
Organization: Wayne State University, C&IT
Date: Wed, 2 Sep 1992 17:11:37 GMT

In article <3T5DqB3w164w@mintir.new-orleans.la.us> elendil@mintir.new-orleans.la.us (Edward J. Branley) writes:
>
>What Clinton proposes is more dramatic than 1990, since that was a compromise
>that was hammered out by two diametrically opposed groups.  Clinton's economic
>plan calls for tax increases to control the deficit and re-direction of
>spending from areas where it is not necessary (certain defense expenditures,
>for example) into areas where the government can make a contribution to the
>overall economy, such as job training, education, etc.
 
This is exactly why Clinton is going to drive the economy into the toilet.
I'm surprised all the sharp minds out there haven't realized you can't
reduce the debt by raising taxes! We did raise taxes in 1991- and increased
spending by an even greater amount. Debt reduction (usually completely
confused with deficit by nearly every poster and politician) has been used an
excuse to raise taxes and spending ever since the Dems suddenly developed
an allergy to debt in the high-growth, high-employment, high-social-mobility
80s.
 
And again this silly claim that spending money is going to help the economy!
We know this is ridiculous for a number of reasons. For one, we know that
spending doesn't improve education. That's been established by many studies.
We also know that what passes for an education- i.e., a liberal arts degree-
has nothing to do with either education or job skills. I taught college long
enough to see that, as have many authors.
 
The data is staring us in the face- the ups and downs of the last 40 years.
We see that growth is tied to the influx of capital, low interest rates,
low inflation, high investment, those sorts of economic indicators. The
mechanisms are idiot simple as well. We have repeatedly seen how interest
rates and inflation directly affect investment and capital flow. Anyone
who stayed awake in Econ 101 has seen the simple arithmatic, and for those
that haven't, I've repeated it a number of times.
 
But for some unexplicable reason, we have a hard core that rejects a
rational methodology anchored in the historical record of the last
hundred years, and instead insists that the only way to economic health
is through hand waving and the invocation of the magic words "infrastructure"
and "education".
 
Did Holland in the 18th century accumulate the greatest wealth in Europe
through infrastructure? Was their secret high taxes and education, given that
the majority of the were functionally illiterate?
 
Did I say 100 years? The answer has been known for well over 200 years. But
only to those who read and think- not those who merely repeat what their
handsome candidate says through his teeth.
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 Michael Joseph Edelman           Wayne State University
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