Thursday, April 15, 2010

Name your Poison

Cactus again presents us with a good Post, which should be read carefully. The timing of Tax Cuts and Recessions is a very important subject, whose examination leads one eventually to the supposition that Tax Cuts may be a underlying cause of the Recessions themselves; remember that no one but myself would say these words, as it is a claim which even liberal economists find hard to swallow. I, though, contemplate strange things like the possibilities of releasing too much investment capital for the level of Production currently in force, with resultant forces from this overexpenditure leading to a lack of Profits in the overall Production schedule–it is the old resource pricing thing again plus a lack of Consumer Demand for the additional Product. There has been a lot of work on marginal increments in economics, but no one but me has considered the knife-edge characteristics of the Profits. Here it is entirely possible than an alteration is uniform Profits (Average) of 1% or less can mean the difference between Boom or Recession; possible because no one has statistically checked. It is remarkable as economists check out every other variable.

I should explain myself somewhat further on the above issue, as I believe that too significant a Profit ratio is as troublesome to a balanced economy as is too insignificant a Profits ratio. This means that excess Profitability may indeed be a cause of Recessions. There may be a Profits boundary which is a knife edge, where less than the optimum Profit brings loss of Growth and underdevelopment, while more than the optimum Profit brings Recession with overproduction and under-Consumption of Product. A statistical Study could revamp the study of economics once more, with one more Revisionist ideation.

I was going to discuss a different Post also; but as I examine what I have already written, I will honor Tax Day by explanation that if the above Speculation is accurate, then Government taxation becomes clearly important. Government tax rates become the forum to artificially alter the profitability of Production, and influence Consumption patterns. A refusal to consider higher taxation may be an insistence on recurrent Recessionary conditions. The Reader must understand this Speculation is way into the Outfield, but it is the area where you get the Home Runs. Enterprising young Graduate Students should consider this an arena to make a Name, because it will bring a greater understanding of Profit ratios even if the Suppositions are proven Wrong. Fool I was, and Fool I be, but Who gets fooled when the Day is done? lgl

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