Re: DeLong On Deficits, Interest Rate

["J. Barkley Rosser, Jr." <rosserjb@xxxxxxx>]

      Well, in fact double taxation of dividends
does distort corporate finance.  But, if one
wants to get rid of it, then there needs to be
some offset both for the lost revenue and for
the regressive impact on the distribution of
income.  The obvious move would be a sharp
increase in the top marginal income tax rate.
But, needless to say, the Bush administration
is proposing exactly the opposite to go along
with its dividend proposal.
     BTW,  the criticism of Hubbard's hypocrisy
is all to valid.  Yet another case of an economist
selling out for power, although I have seen a
report that he is about to leave the administration,
or at least his position as CEA Chair.
Barkley Rosser
----- Original Message -----
From: "pdavidso" <pdavidso@xxxxxxx>
To: "Robert Vienneau" <rvien@xxxxxxxxxxxxxx>
Cc: <pkt@xxxxxxxxxxxxxxxx>
Sent: Sunday, January 26, 2003 8:44 PM
Subject: Re: DeLong On Deficits, Interest Rate


> >===== Original Message From Robert Vienneau <rvien@xxxxxxxxxxxxxx> =====
> >Has anybody been following Brad DeLong's weblog lately?
>
> Why bother with such foolishness?
>
> In many, many posts he
> >has objected to the recent Bush tax-cut-on-some-divends policy. DeLong's
> >objections
> >have been overwhelmingly on the following grounds:
> >
> >(1) Higher deficits will ultimately raise interest rates. And economic
> >growth will be
> >slower as a result. It's all a matter of supply and demand, as taught in
> >the first weeks
> >of a freshman economics class. The laws of supply and demand have
theoretical
> >exceptions, but there's no particular reason to expect  the bond market
to
> >be special.
> >One cannot really argue otherwise.
>
> What nonsense!  This is only true if the economy is already at full
employment
> and is a closed economy.
> >
> >(2) Glenn Hubbard, the head of the Council of Economic Advisors, believes
> >this, as
> >shown by his textbook. So he is being hypocritical in his public
> >statements, where
> >he says otherwise.
> >
> >Paul Krugman has raised these points in his NYT column, too.
> >
>
> These are "three b;ind mice"  Remeber the nursery poem.  See how they
> ---write?
>
> >So much for New Keynesian and Stiglitz's macroeconomics, which I don't
know
> >much about. I seem to remember some debate here about how open
leading-edge
> >mainstream macroeconomists are to something approaching Paul Davidson's
> >views on uncertainty. Here's a data point.
>
> Of course they are not anywheres near my argument.
>
>  In fact, when Joe Stiglitz was editor of the JOURNAL OF ECONOMIC
PERSPECTIVES
> he tried to kill my manuscript on probability and uncertainty which was
> ultimately published in the JEP -- but only after the paper went through
21
> rewrites  (over more than two years)to delete or change things that Joe
> disliked or felt threatened  by. [See one footnote in the paper for some
> evidence that I managed to sneak through in galley.]
>
>  And then when the JEP developed a symposium on Alternative Macroeconomic
> theories" Joe (through his assistent at the JEP] in essence withdrew a
> previous invitation to have me write a paper on Post Keynesian
Macroeconomics
> for this symposium.
>
> >I guess it is good that Krugman criticizes the Bush administration's
lies.
> >But I
> >cannot say I am comfortable with leading "respectable" spokesmen for my
side
> >putting forward such trash about economics.
>
> You are right on target Robert.
>
> Paul
>
> Paul Davidson
> Editor, Journal of Post Keynesian Economics
> University of Tennessee
> SMC 503
> Knoxville, Tennessee 37996-0550
> phone # (561)369-1951; fax #(561)369-1951;
> email pdavidson@xxxxxxx
> http://econ.bus.utk.edu/davidsonextra/Davidson.html
>
>