and here's a resounding shut the fuck up about trickle down economics in the form of wikipedi:

http://en.wikipedia.org/wiki/Supply-side_economics#Research_since_2000

The head of the CBO got fired by Bush because he demonstrated that passing the Bush tax cuts would be a bad idea.

The Kos article was not clear on what tax benefits the rich have that would encourage them to buy bonds. Federal bonds are exempt from state taxes and state bonds are exempt from federal taxes so I can see some shifting of assets in bond portfolios depending on the state of residence, but the yields on both federal and state bonds are lower than corporate bonds to adjust for the tax differences.

BO has mentioned in a number of places that the rich "invest in China". In fact, the Chinese are investing in us. Which means the dollars we spend on imports on China are being lent back to us for investment purposes. There is nothing wrong in increasing public or private debt if there is a growth in investment to justify it. If there is no growth in investment, the Chinese will get grumpy about holding our bonds and will dump them.

The wikipedia article is a mixed bag. There is some dispute about the elasticy of labor. If it is small, we are at the elbow of the Laffer curve and are about at the limit of how much additional revenue we can get from increasing the marginal tax rate.

The bit about Russia was interesting. They got rid of their progressive system and got more revenues. One reason: less incentive to cheat.

If china tried to sell it's bonds it would get nothing for them. That's how supply and demand works. If you increase the supply of American bonds ergo china selling it's us bonds, then the price will dramatically fall. It's the same reason china isn't using it's 3 trillion surplus on anything.

China does not invest in us, buying debt and taking principle does not contribute to our growth.

That's why you want to move to Russia right? It has the best income equality right? I mean its not as if all their wealth has coalesced into a bunch of billionaires or anything *cough*.

BO:

Buying debt does contribute to growth if it financing private physical capital or public physical capital.

If the Chinese dump their bond holdings they don't get "nothing", they get less. The buyers of the dumped bonds get them for a discount, which means higher yields, which covers the increased risk which caused the Chinese to dump them in the first place. Meanwhile, the higher yields blows the federal budget just on debt service (Obama himself said this in a recent speech).

If you don't like what your wiki says, it's a personal problem. He who takes up the wiki will die by the wiki.

You make extrordinary claims like "this will cancel this" yet you never show me evidence and everything you say is anecdotal. Why do you feel you are exempt from proving why you believe what you believe?

China is not as liquid as you think, there's a good article on the times about why they can't do much with their money, that being said-- they do not buy debt from businesses, they buy debt from the us government which inturn puts a heavier burden on the nation. We may have to cut Medicare and social security because of this, at least that's what the conservatives want to do.

Skrum, selling trillions of dollars worth of debt would severely devalue the dollar and make these bonds worthless. That's why china can't sell them. Do you know how much a trillion is? 8% of the GDP.

Anyone that defends trickle-down economics should be shot. Ronald Reagan's festering, bloated corpse should be dug up, put on trial in front of a People's Tribunal for crimes against humanity, hung, drawn, and quartered.

BO:

You are the one who has the burden of proof. (that the rich have a lower MPC). You have cited a source by marxism that I have been unable to find yet. The results of the food stamp experiment are straightfoward; explaining the cause of the results is more tricky. Incidentally, the food stamp experiment is unusual in economics because normally economists don't get to experiment. Mostly we look at data ex post facto and have to look at changes in background variables that cloud the results.

China selling the debt would not send down the price of the dollar. It would just be an indication that the Chinese would rather hold dollars (whose dollar value does not vary) as opposed to bonds (whose dollar price could fall). In fact the dollar would probably appreciate, making our exports harder to buy.

After Japan got hit by the earthquake/tsunami/chernobyl they started dumping assets to repatriate their yen because the yen will be needed to finance rebuilding. The yen appreciated on the markets because of being withdrawn from foreign countries.

I searched on "china times bonds" and got a 2009 article but that probably isn't the one you mentioned.