From: pcollac@pyrnova.mis.pyramid.com (Paul Collacchi)
Subject: Re: Supply Side Economic Policy (was Re: David Stockman )
Reply-To: pcollac@pyrnova.mis.pyramid.com (Paul Collacchi)
Distribution: na
Organization: Pyramid Technologies, Mt. View, California.
Lines: 43

In article <Ufk_Gqu00WBKE7cX5V@andrew.cmu.edu>, ashish+@andrew.cmu.edu
(Ashish Arora) writes:
|> Excerpts from netnews.sci.econ: 5-Apr-93 Re: Supply Side Economic Po..
|> by Not a Boomer@desire.wrig 
|> [...]
|> 
|> >    The deficits declined from 84-9, reaching a low of 2.9% of GNP before  
|> > the tax and spending hike of 1990 reversed the trend.
|> >  
|> > Brett
|> Is this true ?  Some more details would be appreciated.
|> 
|> cheers

Actually not.  Brett himself has actually posted the data previously.
What declined from 84 to 89, as I remember it, was _percent
increase_in_deficit_growth, i.e. the rate of growth of the deficit 
(2nd derivative of total deficit with respect of to time) decreased.
Brett apparently has numbed himself into thinking that the deficit
declined.  If you keep spending more than you earn, the deficit keeps
growing.  If you keep _borrowing_ at a lesser rate than you borrowed
previously, the deficit increases.  You only decrease deficits when your
income exceeds spending and you use the difference to pay off debts.

Figgie's book paints the real data, pictorially, in gory detail.  Each
president, essentially ran up twice as much total debt, in half the time.
Reagan/congress was simply awful.  Bush/congress was unbelievable.

As a really rigorous aside to this thread.....

During pledge night the other night on the public channel, there was an
"economist" who gave an hour or so presentation.  His data was predictive
and based largely on population data. I don't know his name, but his
arguments were brilliant.  He confirmed, with data, what many of us know
with common sense -- the boom of the 80's has nothing to do with government
policy, particularly "supply side" policy, since taxes do not "cause" 
economic activities.  People cause economic activity.  More can be 
explained by watching population waves roll through the years and 
create cycles.  He has made models and predictions for years well into
the middle of next century.  It will be neat to see how accurate he
is.

Paul Collacchi
