tag:blogger.com,1999:blog-36856489.post2651557381403598756..comments2023-10-12T07:43:47.713-04:00Comments on taxmanblog: DittoUnknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-36856489.post-85741537798599309172010-10-04T12:25:43.498-04:002010-10-04T12:25:43.498-04:00You should create a "best of" tag and ma...You should create a "best of" tag and make this the first post. Loved it.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-36856489.post-42546718797682954532010-10-04T11:48:11.631-04:002010-10-04T11:48:11.631-04:00You can look at the economy statically or dynamica...You can look at the economy statically or dynamically. The static view is one where you can change a desired variable and that's it. A dynamic view assumes that when you change a variable, all other variables are affected unpredictably. <br /><br />The static view works well for liberalism/socialism. It simplifies their arguments. If a liberal can convince someone to accept the premise of static effect all of the following arguments are believable:<br /><br />-An increase in minimum wage raises the standard of living for everyone. <br />-Price controls lower costs. <br />-Tax rate increases increase tax revenues <br />-Tuition increases raise tuition receipts<br />-Keynsean stimuli boost the economy<br /><br />The list goes on and on. The static model also works well when trying to break down the economy into formulas that can be published in a textbook which is why the static model is what universities like about it. It also plays into the notion that an economy is a giant machine with a couple of levers that can be used to make it do what we want, which is a convenient assumption for governments, which naturally want to control as much as they can. <br /><br />Conservatives, on the other hand, assume that the economy is dynamic. We know that pulling a macro "lever" on the economy will have unintended, usually negative consequences. Raising the minimum wage might help those who can keep their job, but will effectively fire the least skilled, least educated. We know this is a bad thing. <br /><br />Liberals don't accept this because it does not fit the static model results that they predict in their textbook and college laboratories. They just assume that an outside variable screwed them up (and call the variable evil right wingers). In fact the system is dynamic and they are their own variable.Anonymousnoreply@blogger.com