Supply-Side Economics

[whell]

Originally Posted by init4fun

Hi whell, If you'd care to explain how it is that we have the ability to resolve the instability in fuel prices, I'd be interested in hearing your thoughts on it.....

This covers it pretty well:

https://www.uschamber.com/energy/com...to-do-about-it

[Rajoo]

Originally Posted by whell

No, I'm not saying that. What I am saying is that we're the cause of many of our own issues.

If we manage the things well that ARE under our control - for instance, stop spending money we don't have, ramp up domestic oil production, etc. - we'd likely be experiencing far less economic turbulence than we are today.

In principle, we are in agreement as far as managing the economy goes, how is where we may/will defer.

Ramping up domestic production: Shouldn't that be happening especially oil well over $50/barrel? And if its not happening, why.

Stop spending money? After TFG handed out tax breaks while screwing some of us in the left coast by capping interest & real estate tax deductions. Screwing people like me who has owned a second home for years.

Now when you say "stop spending money we don't have", is this code to stop helping Ukraine as I suspect, because we have been spending money we don't have continuously since around 2000 if I am not mistaken. So why the sudden urge for fiscal prudence?

[whell]

Originally Posted by finnbow

My post contained exactly zero Democratic talking points, just facts reflecting the economic reality. That said, nowadays facts do indeed have a liberal bias.

Just like KellyAnn had alternative facts?

[finnbow]

Originally Posted by whell

Just like KellyAnn had alternative facts?

Actually, yes. Exactly like that.

[whell]

Originally Posted by Rajoo

In principle, we are in agreement as far as managing the economy goes, how is where we may/will defer.

Ramping up domestic production: Shouldn't that be happening especially oil well over $50/barrel? And if its not happening, why.

Because the current political climate doesn't favor investment in additional production and refinement. I've mentioned this before, but:

Imagine that you're the CEO an oil and natural gas exploration company. between 2008 and 2020, you've seen the political winds shift all over the place, from the gov't funding (with decidedly mixed results) so-called green energy companies and start-ups and tightening access to exploration for oil on public land, to encouragement of exploration and production, back to shutting down access to increased supply and curtailing access to drilling rights.

Now, the administration is taking you to task for higher pump prices and wants you to increase production. This is the same administration run by the same Presidential candidate that, when asked if he would shut down the oil industry, said: “I would transition from the oil industry, yes,” Biden replied.

Setting politics aside for a second, how do you, as CEO of an oil company, get your shareholders excited about the idea of investing in new production or refinement capacity in the face of that comment? That comment was also followed by action:

On his first day in office, Biden signed an Executive Order to impose a temporary moratorium on oil and gas lease activities in the Arctic National Wildlife Refuge, withdrew offshore areas in Arctic waters and the Bering Sea from oil and gas drilling, and revoked a key permit for the Keystone XL pipeline. In June 2021, the Biden administration went further in ANWR and suspended oil and gas leases.

In his second week in office, he signed another Order that put a “pause” on new oil and gas leasing on federal lands and offshore waters. The Biden Administration violated Congressional statute by halting all federal oil and gas lease sales – onshore and offshore – and is thereby laying the groundwork for a decline in federal production over time.

The answer is that you're probably not going to get your shareholders to go along with the idea of large production and refinement capacity investments.

Originally Posted by Rajoo

Stop spending money? After TFG handed out tax breaks while screwing some of us in the left coast by capping interest & real estate tax deductions. Screwing people like me who has owned a second home for years.

Not to make light of your additional tax costs, but there are probably some devout leftists (and maybe some fiscal conservatives if there are any left) who'd ask why the gov't should be subsidizing your 2nd home with a tax break. The tax treatment of mortgage interests (also, as an aside, an interesting example of supply-side theory in action) was intended to lower the overall cost of owning a home to make a home purchase more manageable and more attractive to more people. It became essential fabric of the US tax code, until it wasn't after a stroke of a pen in Washington.

On the other hand, this is a fine example of the arbitrary nature of our current tax policy. Taxes should fund the legitimate and essential functions of gov't. One can debate the relative pluses and minuses of individual tax regs, such as the tax treatment of mortgage interest. But when such tax regs can be changed with the political winds in Washington, it makes it very challenging for individuals and corporations to make long-term plans for decisions like major purchases or investments.

Originally Posted by Rajoo

Now when you say "stop spending money we don't have", is this code to stop helping Ukraine as I suspect, because we have been spending money we don't have continuously since around 2000 if I am not mistaken. So why the sudden urge for fiscal prudence?

Nope. I've been pretty consistent on this point for many, many years, and have also been accumulating disappointment with those I've voted for most of that time. We have, for years, had an absurd US tax system, faulty fiscal policy, and an appetite to spend far more than we collect in taxes, despite the fact that we set a new record in Federal tax collection nearly every year.

[Rajoo]

Originally Posted by whell

Not to make light of your additional tax costs, but there are probably some devout leftists (and maybe some fiscal conservatives if there are any left) who'd ask why the gov't should be subsidizing your 2nd home with a tax break. The tax treatment of mortgage interests (also, as an aside, an interesting example of supply-side theory in action) was intended to lower the overall cost of owning a home to make a home purchase more manageable and more attractive to more people. It became essential fabric of the US tax code, until it wasn't after a stroke of a pen in Washington.

So why give a tax break to those who don't need it since you argue that my second home, or for that matter primary home need not be subsidized? Even worse is calling it a "Middle class tax cut" while only the top 1%, actually the top 0.1% benefited. And where did the money come from?

[Rajoo]

Originally Posted by whell

Nope. I've been pretty consistent on this point for many, many years, and have also been accumulating disappointment with those I've voted for most of that time. We have, for years, had an absurd US tax system, faulty fiscal policy, and an appetite to spend far more than we collect in taxes, despite the fact that we set a new record in Federal tax collection nearly every year.

I totally agree with you on this, but we will differ on how fiscal prudence can be established. And it ain't with tax cuts and I for one am all for everyone paying their fair share and increased audits by the IRS.

Last month I casually mentioned to my CPA that most independent construction people (including small contractors) here in Reno prefer or only accept cash and am certain pay no taxes. My CPA said he will not take any small construction companies as a client because "they even want to deduct dog food".

OTOH, my company had to pay a hefty fine for not collecting sales tax from our customers, not because they had to pay the tax, but because we did not have the appropriate paperwork from them.

[finnbow]

Originally Posted by whell

Nope. I've been pretty consistent on this point for many, many years, and have also been accumulating disappointment with those I've voted for most of that time. We have, for years, had an absurd US tax system, faulty fiscal policy, and an appetite to spend far more than we collect in taxes, despite the fact that we set a new record in Federal tax collection nearly every year.

Somehow, you disingenuous responses imply that Republicans have the answers to our fiscal woes, notwithstanding the fact that they believe tax cuts for the wealthy cure all ills and that enforcement of existing tax law is tyranny.

[whell]

Originally Posted by finnbow

Somehow, you disingenuous responses imply that Republicans have the answers to our fiscal woes, notwithstanding the fact that they believe tax cuts for the wealthy cure all ills and that enforcement of existing tax law is tyranny.

If you read my post and inferred that, you're reading something that is not there.

[whell]

Originally Posted by Rajoo

I totally agree with you on this, but we will differ on how fiscal prudence can be established. And it ain't with tax cuts and I for one am all for everyone paying their fair share and increased audits by the IRS.

Last month I casually mentioned to my CPA that most independent construction people (including small contractors) here in Reno prefer or only accept cash and am certain pay no taxes. My CPA said he will not take any small construction companies as a client because "they even want to deduct dog food".

OTOH, my company had to pay a hefty fine for not collecting sales tax from our customers, not because they had to pay the tax, but because we did not have the appropriate paperwork from them.

I'm all for folks paying the appropriate amount of taxes. Unfortunately, the tax code has become as much about social engineering as it is about collecting revenue.

I think tax cuts are PART of the answer. However, we need to find a way to agree on the appropriate size and role of the Federal Gov't and State/local governments. Tax cuts w/o the accompanying analysis and fiscal restraint or efforts to "right-size" the role of government in this country have not been successful. Thus, we go year after year of record tax receipts hand in hand with increasing debt. None of that makes any sense, nor should it be allowed to continue in a sane world.

The accompanying issue is that the ability to tax goes hand in hand with the ability to wield power and garner campaign contributions. Washington has become an absolute cesspool where money=power, and is totally unresponsive (or downright hostile) to change. The reason, the elected don't want to give up their access to money and power.

The cynic in me says that the elected class is perfectly happy about the divisiveness that exists amongst the electorate in this country. The more they can the rabble fighting amongst themselves, the more insulated they are from accountability and results. I'd rather not believe that, but the more I'm exposed to what goes on in DC, the more convinced I am that this is the case.

As a result, unless there's some level of unity amongst the voters on the subject of how much gov't do we really need and what's the best way to predictably fund it, we'll never get our arms around the problem.