The Surreality Based Community responds to the big picture:
I. Sixty years of history.
Doesn't say much about the economics; rather says a lot about the politics.
II. Patrick has proven that the future will always be like the past, except when he needs it to be different to justify his beliefs (e.g., the new contribution of foreign investments that will justify big stock market returns).
And (our favorite):
III. How about "three strikes and your out" for tax evasion? Cheat three times, and you are put up against the wall and shot. If it's good enough for drug addled 7-11 robbers and penny-ante shoplifters--it's good enough for tax cheats.
In response, the FLUBA Committee to Monitor the Intellectually Exhausted says:
I. If, in the last six decades, Tobin, Heller, Schultz, Kahn, Stiglitz, DeLong et al haven't been able to boost tax revenues to even 19% of GDP for more than a year or two (even with tools available including a top marginal tax rate of 91%) then the Sawicky-Baker-Krugman axis will not be able to do so either. And even if they did, it won't come any where near their 30% wet dream.
Whether one wants to call it politics or economics is irrelevant. It's people responding to incentives.
II. There is a huge difference between increasing revenues by 67%, and merely maintaining long run (over 100 years) returns to investment by a portfolio strategy that is more heavily weighted to global investment. To which, Wharton's Jeremy Siegel seems to agree (thanks to Arnold Kling):
SCHULZ: ....You write in your book: "looming in the future are changes more fundamental, and long-lasting, than all the crises that have confronted our economy in the past."That sounds troubling especially for investors. What exactly are you talking about?
SIEGEL: What I am talking about is the aging of the population, the fact that the number of workers per retiree is going to go down, drastically....
And that's why I believe the rest of the world -- which is a much younger world -- is going to loom as a far more important piece of the entire growth puzzle and as a part of investor's portfolios.....
The best solution of the aging problem is what I call the 'global solution.'
.... In 50 years the United States will be more aged than all of Florida is today, but we will be, existing in a younger world. So.... We will be selling assets into the world market. They will be buying, they will be absorbing, they will be saving, and they will be producing the goods that we will be importing to satisfy our retirement needs. And, I think that is the only way that we could have an ever-increasing retirement period with the shrinkage of workers and the extension of life expectancy.
III. When one has to resort to comparisons of responsible, wealth creating producers to destructive street criminals, then it's obvious you know you have lost the argument.