tag:blogger.com,1999:blog-8487128531050281473.post6294435376891953333..comments2024-01-08T14:24:03.718+00:00Comments on Economics Essays: 7 Common Economic FallaciesTejvan Pettingerhttp://www.blogger.com/profile/03405988099792035111noreply@blogger.comBlogger21125tag:blogger.com,1999:blog-8487128531050281473.post-34475028156535277902011-08-18T17:11:44.229+01:002011-08-18T17:11:44.229+01:00•If you cut income tax for high-income earners, th...•If you cut income tax for high-income earners, they are likely to save a high % of their extra disposable income. Their marginal propensity to consume is low.<br /><br />Yes indeed. This was the basis of John Maynard Keynes macroeconomic policies. It is precisely what IS required to get the economy moving again. It's what Hong Kong did and made it the economic powerhouse it has become. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-76547598189677857992010-12-08T14:14:09.321+00:002010-12-08T14:14:09.321+00:00Most of these "fallacies" are in fact &q...Most of these "fallacies" are in fact "truths". This has got to be the most economically illiterate economics blog on the web! I know you're aiming at A Level students but this really is nonsense dressed as fact.<br /><br />Immigration can cause unemployment. Although it increases AD, immigration will still increase unemployment unless the increase in AD is greater than David Breakernoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-18427026383948212812010-10-21T17:32:40.850+01:002010-10-21T17:32:40.850+01:00I agree with the premise of one, but not the total...I agree with the premise of one, but not the totallity. Immigration/illegal immigration has a huge impact on the work force and labor supply. Sorry but you are half right. If supply significantly changes the it does change employment. If the illegal population is 10 percent or less perhaps. However, as is truly the case in the U. S. yes it does impact employment. Lets see, there are in reality Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-86256401877555514212010-07-26T02:10:14.283+01:002010-07-26T02:10:14.283+01:00I've never heard the argument that tax cuts ma...I've never heard the argument that tax cuts make people work harder. I think the benefit of tax cuts is that they lead to more money in the private sector. From what I've experienced, government tends to be far less efficient than the private sector. More money in the hands of the private sector means resources (i.e. money), on average, will be used more efficiently leading to a more Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-2885896926333372032009-12-07T11:40:25.792+00:002009-12-07T11:40:25.792+00:00Anonymous said you missed saying that the private ...Anonymous said you missed saying that the private sector is more efficient than the public. But doesn't define what is meant by 'efficiency'. Efficient with respect to what ? For example, the British National Health Service is more efficient at delivering health care to 100% of the population 100% of the time whilst the US private sector delivers only to some and only some of the Brist74noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-89869737105456846372009-11-01T12:57:10.123+00:002009-11-01T12:57:10.123+00:00'7. Tax Cuts will boost the Economy' as a ...'7. Tax Cuts will boost the Economy' as a fallacy is simply wrong. Putting more money in the hands of the consumer in simple terms is a pay raise for every worker paying taxes. To many times tax cuts are looked at from the wrong side (the effect on the government) and not the <br />effect it'll have on the millions of individuals who suddenly have more money to spend.<br /><br />This Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-64168860008970439832009-09-21T18:00:07.483+01:002009-09-21T18:00:07.483+01:00What you left out is that the private sector is mo...What you left out is that the private sector is more efficient than the public sector. So ctting taxes will allocate more money into the more efficient private sector increaseing welfare for allAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-21923868387321678842009-09-19T23:10:42.400+01:002009-09-19T23:10:42.400+01:00these arguments really are Econ101 type arguments,...these arguments really are Econ101 type arguments, very black and white analysis. i agree somewhat with many of your points, but in relation to number 1, high levels of immigration from countries of lower standards of living, can tend to produce a decrease in salaries and/or a temporary displacement of the local labour force from one sector to another, while they adjust and retrain. so while longAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-21581542801007036582009-05-22T21:58:59.501+01:002009-05-22T21:58:59.501+01:00I positively agree with #4. I think that the reas...I positively agree with #4. I think that the reason for this fallacy can be traced back to the way people perceive themselves versus others. <br /><br />Ask someone "would you take a promotion with a $10,000 per year raise even if you had to work harder and pay 60% of the increase in taxes?"<br /><br />I suspect that you'll hear something like: "I would, but most people wouldn't".-erhttps://www.blogger.com/profile/13432512057295790659noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-75218258598773909272009-05-22T21:33:25.345+01:002009-05-22T21:33:25.345+01:00Well done article. I would be interested in your ...Well done article. I would be interested in your thoughts on producer vs consumer sovereignty.-erhttps://www.blogger.com/profile/13432512057295790659noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-58259928491133311012009-05-04T20:38:00.000+01:002009-05-04T20:38:00.000+01:00You stated: "Some people want a target income of s...You stated: "Some people want a target income of say £20,000. Thus if taxes fall they can earn the same by working less. Empirical evidence suggests there is little if any supply side incentive for cutting US or UK tax rates."<br /><br />I disagree with this statement. In America, if someone was making 50k a year take home pay and their taxes were cut as to give them a take home pay of say 55k, arubawaynehttps://www.blogger.com/profile/10809744622207299445noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-30657484192864655222009-03-31T12:56:00.000+01:002009-03-31T12:56:00.000+01:00>>Misesian said... If a job is uncomfortable...>>Misesian said...<BR/> If a job is uncomfortable or unappealing then the wage rate will increase to compensate for it.<<<BR/><BR/>That might be what's taught in an Econ 101 classroom, but you need go no further than out the door to see how unrealistic that claim is. What are the lowest paid jobs in America? The worst, the most tedious, and often, the most dangerous. i.e. RHOmeahttps://www.blogger.com/profile/17211162297208433285noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-91292376451475061312009-03-23T05:22:00.000+00:002009-03-23T05:22:00.000+00:00As I wrote in November, your #7 point I do not agr...As I wrote in November, your #7 point I do not agree with, in fact the current goverment is proving my point as each day dawns you said:<BR/>If you cut income tax the government has to either cut government spending or borrow. If the government has to borrow from the private sector then they will have less income to spend causing a decline in private sector spending<BR/><BR/>I guess you missed orAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-61299352677552434682009-01-15T22:45:00.000+00:002009-01-15T22:45:00.000+00:00I disagree with what you said about Immigrants fil...I disagree with what you said about Immigrants filling jobs that Americans are unwilling to do. If a job is uncomfortable or unappealing then the wage rate will increase to compensate for it. Once the wage rate increases to the point where the potential worker values wages foregone more than the discomfort of the work he will accept the job and fill the position. This would cause less Misesianhttps://www.blogger.com/profile/15380206587087744578noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-50297657744493075422008-11-03T04:04:00.000+00:002008-11-03T04:04:00.000+00:00So higher taxes increase economic output hugh? Rea...So higher taxes increase economic output hugh? <BR/>Really do not agree with that fallacy. Especially when you see whos hands it falls into. <BR/>Less money in the hands of consumers is not a good thing for econmic growth, no matter what your defintion of "high income earners" are. According to your column, they will sock this money away, and not contribute to the 7% of debt to GDP ratio. Oh Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-38106467992098319012007-03-10T07:09:00.000+00:002007-03-10T07:09:00.000+00:00Bill, Thanks for typo.RE: illegal immigration.The ...Bill, Thanks for typo.<BR/><BR/>RE: illegal immigration.<BR/><BR/>The argument about immigrants is the same whether it is illegal or legal. The legality of an immigrant doesn't change the fact that he will increase AD. However it is worth noting the argument means that immigration won't cause unemployment.There are of course many other issues when dealing with the issue of immigrationTejvan Pettingerhttps://www.blogger.com/profile/03405988099792035111noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-74995727938640885362007-03-09T23:52:00.000+00:002007-03-09T23:52:00.000+00:00Surely high-income earners are more likely to inve...Surely high-income earners are more likely to invest their higher earnings, rather than save them, hence producing investment consumption. This is a much better stimulus to economic growth than non-investment consumption.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-86676155325216056532007-03-09T23:50:00.000+00:002007-03-09T23:50:00.000+00:00I believe that in your first paragraph, you meant ...I believe that in your first paragraph, you meant to say 'over here' rather than 'over hear'.Cerulean Billhttps://www.blogger.com/profile/01212953653794261332noreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-29794907544613723132007-03-09T23:31:00.000+00:002007-03-09T23:31:00.000+00:00Good stuff!Though it might be worth also noting fo...Good stuff!<BR/><BR/>Though it might be worth also noting for point #3 on war, the UK economy (and likely the US economy) pre- and during WW2 was primarily a manufacturing based economy. Increased govt. expenditure on manufacturing goods to feed the war effort would then probably have had a greater effect on the economy as a whole, as opposed to now with our modern services-based economies.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-28008310833497606882007-03-09T22:00:00.000+00:002007-03-09T22:00:00.000+00:00It may not change how hard a salaried employee wor...It may not change how hard a salaried employee works if you change the income tax rate from 25 to 23 percent, but it does affect people's willingness to invest in and/or work for startups.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-8487128531050281473.post-29809805140152662512007-03-09T21:28:00.000+00:002007-03-09T21:28:00.000+00:00Nice red herring about immigration.Nobody objects ...Nice red herring about immigration.<BR/><BR/>Nobody objects to LEGAL immigration.<BR/><BR/>Illegal immigration is what is objected to, and people like you never break your statistics out to differentiate between LEGAL and ILLEGAL immigrants.<BR/><BR/>The reason, of course, is because your arguments fall apart for ILLEGAL immigration, so you slyly lump them together.Anonymousnoreply@blogger.com