GDP isn’t an indicator of an increase or decrease in tax revenue unless you assume a static condition

There’s never a static condition. However, rising GDP is statistically correlated with rising tax revenues. I can run the numbers and draw a graph if you like.

GDP did go up in the 80s, as a natural rebound from the recession of the 70s. Much like Clinton rode a tech boom in the 90s, and took credit for the massive increase in GDP, Reagan was a similar beneficiary of a natural economic cycle.

Lots of reversion to mean in the 2009–2012 period as well.

His tax policy had nothing to do with it.

The entire point to the analysis, which you confirmed by your own experience, is that tax payments never dropped for the wealthy; ergo, the multiplier was moot; if you apply a multiplier to zero you still get zero.

As I said, the money that was freed up by the wealthy no longer having to buy a share in half a cow to lower AGI went in a couple of directions, the largest portions going into the stock market and into real estate. This is nothing more than a very logical observation that previous to Reagan, investment capital was being plunged into inefficient “investments” which only had a good ROI if you consider their tax effect; otherwise, they were shiit.

After the code was flattened, that money went into efficient investments, causing a rise in the capital markets and real estate values, primarily. Obviously, *some* money in that situation is going to get invested back into the economy, (that period correlated to the boom in franchising, for example) but my view is that the money that was invested into business ventures paled in contrast to the amount that went into the stock market and real estate. My SWAG would be no more than 20%.

Further, there was substantial government investment in the military, which spun into the economy as the money turned into government contracts. Tech hiring was going great guns during that period due to DARPA money flowing back into IBM, DEC, and to some extent Sun Micro.

Written by

Data Driven Econophile. Muslim, USA born. Been “woke” 2x: 1st, when I realized the world isn’t fair; 2nd, when I realized the “woke” people are full of shit.

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store