Washington - Edward Prescott, who picked up the Nobel Prize for Economics on Monday, said President George Bush's tax rate cuts were "pretty small" and should have been bigger.
"What Bush has done has been not very big, it's pretty small," Prescott said.
"Tax rates were not cut enough," said Prescott.
Lower tax rates provided an incentive to work, Prescott said.
Prescott and Norwegian Finn Kydland won the 2004 Nobel Economics Prize for research into the forces behind business cycles.
The American analyst, who is a professor at Arizona State University and a researcher at the Federal Reserve Bank of Minneapolis, said a large tax cut in 1986 had lowered rates while collecting the same revenue.
But "in the early nineties the economy was depressed by the tax increase in 1993 by about four percent, and it's right at that level now," Prescott said.
Bush, who is fighting to get re-elected on November 2, has cut taxes by about $1,7-trillion during his term.
The US leader accuses his Democratic rival John Kerry of favoring tax increases, despite Kerry's promise to cut taxes for everyone earning less than 200 000 dollars a year. - Sapa-AFP
Two thoughts:
1. At least this guy's talking about a subject he won the prize in.
2. Oops, the commission must have awarded the prize to this guy by mistake.
Contactsport1
10-12-04, 10:16 AM
Interesting. It would seem to me that there has to be a "sweet spot" for what the rate should be. Obviously no taxes bring in no money, so there has to be a value that gets you the most bang for the buck. What is it? His comments seem pretty unclear about that. It also doesn't mention anything about spending. Even if you maximize your tax intake against your economy's capability, there will still be limit to the amount of money you can spend. (unless you put it on government plastic) Seems like hollow advice without those factors explained.
wendersfan
10-12-04, 10:39 AM
I did a search and I couldn't find this story reported by any US news organizations. I guess it's not true then... ;)
Nazgul
10-12-04, 06:37 PM
Whoops. I wonder if there will be a recount?
Jeremy517
10-12-04, 06:40 PM
He should leave discussion of topics like this to the experts. Actors.
Jim
10-12-04, 06:43 PM
He just won a boatload of money, of course he wants tax cuts.
nevermind
10-12-04, 06:46 PM
Originally posted by Jeremy517
He should leave discussion of topics like this to the experts. Actors.
:lol::thumbsup:
Pharoh
10-12-04, 08:54 PM
Originally posted by Contactsport1
Interesting. It would seem to me that there has to be a "sweet spot" for what the rate should be. Obviously no taxes bring in no money, so there has to be a value that gets you the most bang for the buck. What is it? His comments seem pretty unclear about that. It also doesn't mention anything about spending. Even if you maximize your tax intake against your economy's capability, there will still be limit to the amount of money you can spend. (unless you put it on government plastic) Seems like hollow advice without those factors explained.
Mr. Prescott is an incredibly intelligent individual, one of economics brightest stars and most respected members. Almost all macro econometric models and forecasts employ concepts originated and championed by him and his partner. I know he has expanded his thoughts on this subject previously. I am certain that with a bit of research, you could ascertain what he feels about this matter. Basically though, it is a simple pro-growth sentiment. The cuts implemented by Bush were not large enough to foster a big enough increase in growth that was hoped for, an increase that would necessarily lead to increased revenues as well.
SFranke
10-12-04, 09:03 PM
I don't think it is fair to blame Bush for the tax cut being small. Wasn't the tax cut supposed to be $720 billion before it got slashed (to $550 or $350 billion, I forget which one won in the end) in congress?
Contactsport1
10-12-04, 10:03 PM
Originally posted by Pharoh
Mr. Prescott is an incredibly intelligent individual, one of economics brightest stars and most respected members. Almost all macro econometric models and forecasts employ concepts originated and championed by him and his partner. I know he has expanded his thoughts on this subject previously. I am certain that with a bit of research, you could ascertain what he feels about this matter. Basically though, it is a simple pro-growth sentiment. The cuts implemented by Bush were not large enough to foster a big enough increase in growth that was hoped for, an increase that would necessarily lead to increased revenues as well.
?? I didn't claim to disagree with anything he said, nor did I claim that he wasn't an economics super geek. I just pointed out that without some additional information, the thought wasn't much use.
Mr Prescott? What's your relationship with Edward.
Pharoh
10-12-04, 10:47 PM
Originally posted by Contactsport1
?? I didn't claim to disagree with anything he said, nor did I claim that he wasn't an economics super geek. I just pointed out that without some additional information, the thought wasn't much use.
Mr Prescott? What's your relationship with Edward.
Okay, I may have misread the intent of your post. My apologies.
My larger point is that the additional information is out there, though as you correctly pointed out, not in the article snipet.
As for the last statement, nothing too personal. I will leave it at that. More importantly though, it is a matter of personal respect, respect that I have for him.
Buy: