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| quote: | Originally posted by occrider
Hehe yes my school is relatively small in the grand scale of things with respect to business/economics. It primarily strives to be an MIT wannabe but inadervtantly has an excellent business program. Therefore most of the publicity is placed upon its computer science/engineering/robotics acheivments. As such I'm always surprised/encouraged to hear of CMU's acheivments in the business/economics sector. Hehe and I had to bust my butt for that b ... like I said, the guy was a fuc*ker  |
from my experience, the professors that are always on the cutting edge of new theories are also the worst in explaining current ones. I'm sure it's especially true in an economics class. A graph to a professor repeating the material may only have five factors, but if the professor is currently involved with the reality of economics, the same graph may contain hundreds of factors. a jumbled mess to try to explain coherently, IMO. again, congrats on the B.
| quote: | | Prof Prescott says lower tax rates offer an incentive to work. |
He is hanging in good company. occrider will know better than i, but this quote may imply that prescott isn't a proponent of furthering the revenue in trickle down economics. Unless by "incentive to work" he is speaking of those who on hearing of an upper-bracket tax cut think "hmm, maybe i will open that fortune 500 company today", i'll assume that he means the average middle to lower class who doesn't want to work forty hours a week only to earn 2/3 of their pay.
more money directly in the hands of the consumer translates into more money circulating throughout the service sector, which will cause a greater distribution of money throughout the economy. i'll further elaborate this idea and call it "the drag's economic beer theory".
upon realizing on payday that i have more money than my budget requires (let's say $30), i decide that the only logical way to use it is to go drinking. my tab that friday night is $20, but due to the good service i recieved coupled with the knowledge that all my bills are paid to date, i tip $10 to the bartender. of the $20, a percentage goes to the small business i haunt, and the rest to the beer distributer (thus both gaining the benifits of increased business). the bartender, earning my $10 plus money from other customers who share my own personal financial wisdom, realizes that his bills are paid and now has enough money to make those much needed car repairs. his shop expenditure go to parts and labor, and the mechanic now has money to go out drinking.
this becomes a perpetuating process that allows a multitude of businesses to show increased profits before the money trickles up to corporations who provide the majority of the needs for these small businesses. once that money is reported by the corporations and further invested into the market, you may see a rise in the market (in addition to directly causing consumer confidence to rise).
yeah, the theory is full of holes that i don't feel like patching right now, but i think it's a strong foundation for a theory that may show better economic growth than bush's plan of giving the tax dollars directly to the market investors. this makes kerry's plan look less of a robin hood plan of stealing from the rich and giving to the poor, and more like stealing from the rich, giving to the poor so the poor can spend it and get it back to the rich.
ps. occ, sorry for furthering the politicalizing of your thread, i just felt like imokruok gave a misrepresented association of your professor and bush. besides, i wanted to give a economic argument that stated the importance of drinking beer
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