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A tax revolt…: what kind of legitimacy is this?

   

The deficits occurred because people would not pay any more tax. They would not pay for the government. That's some form of tax revolt.

   

Deficits occurred because of the Keynesian ideology which said borrowing funds is a good thing when a recession is looming.

   

Well the deficits got out of control. It's interesting that Keysenian stimulation doesn't even work. The borrowing per job created over the long term became something like $168,000. In addition they imported immigrants to take the jobs that were created by the borrowing anyway. Finally they ran deficits late into the expansion of the 1980's so the country went into a deep recession to control inflation starting with a large deficit. So, no, it wasn't just Keysenianj stimulation it was out of control politicians.

   

You forget that after recessions there are recoveries that are jobless recoveries. A jobless recovery is a cause of revolt only for those persons, mostly men, who see themselves only as workers.

   

The $168,000 is deducting the recession years and a year or so of recovery. There was tremendous government fiscal stimulation but not much job creation, hence the $168,000 figure. When the deficit was eliminated job creation picked up, although all this is a little hard to explain.

The deficits were not popular but people did not want their taxes raised. It would have been something like $4,000 a family. So an issue for mostly everyone was the $4,000. Men that lost their jobs were another problem.

   

Our fiscal regime would be sound in an economy where machines are a complement to workers. But the reality is that the workers are in competition with automated machines. The public deficits are fundamentally the consequences of workers losing this competition.

   

That's a least a bit too deep. Machines increase productivity. People like railway workers and electrical utilities that have heavy capital investment per employee capture the productivity in high wages.

   

Capturing what is not deserved is the root of fiscal problems:

The late Nobel Laureate, Herbert Simon argues that an income tax of up to 70 percent would tax only the portion of a person's income that comes from productivity advances that they had nothing to do with and would leave their individual incentive to work largely, if not fully, in place.

   

I argue something like that. I argue high taxes increase the incentive to work because you gotta pay the rent.

   

Economic rent is the difference between what a factor of production is paid and how much it would need to be paid to remain in its current use.

http://en.wikipedia.org/wiki/Economic_rent

   

One day I'll look it up, but not right now.

   

What a person really needs to compensate his (work) effort, (investment) risks and/or his saving are deserved incomes, nothing else.

   

Can you define that it terms that resemble reality?

   

When a reality is subjective, you have to ask for credibility.

   

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