Product Details

• Amazon Sales Rank: #462117 in Books
• Published on: 2008-10-14
• Original language: English
• Number of items: 1
• Binding: Hardcover
• 352 pages

Customer Reviews

A review of current economic chaos
The End of Prosperity is a very realistic look at the current bleak economic situation facing United States since Great Depression of 1929. The reform that was created as a result of this Great Depression; the creation Security Exchange Commission, relentless efforts for corporate transparency, and greater information for investment decisions fired backwards to destroy these very ideals that upheld the free enterprise system in a strange twist of events.

Mortgage lending companies were not setup as traditional depositories or brokers, but as real estate investment trusts (REITs). It is a corporate form for developers to avoid corporate income taxes. REIT pays out the earnings to shareholders who pay personal income taxes on them. Since they are publicly traded, it avoids regulators. But it comes under SEC which focuses mainly on insider trading, and corporate transparency, and not on mortgage lending. The lenders and borrowers used this little gap to mismanage the mortgage industry. There is another side to this story; for years congress commanded banks through Community Reinvestment Act to lower credit standards, and make more loans to low-income borrowers who could not payback mortgages.

The principal author (Arthur Laffer), a strong proponent of supply side economics provides an insightful review of the excesses of Keynesian dynamics that paved the way for governmental intrusion; higher taxes, manipulation of interest rates through control of monetary flow (through federal reserve) thereby weakening the dollar, and currently large scale bailouts of failed economic systems, that is in excess of one trillion dollars, and not to mention the national debt of $10.6 trillion. Just the interest payments on these vast amounts scare most nations. Major investment firms, mortgage-lending industry, and commercial banks are being bailed out, and even the major auto industries are seeking governmental intrusion to fix the financial problems during the merger process. States such as California is almost bankrupt is also looking for bailout. The question is who is going to pay for these excesses; the magic word is, "the taxpayer." Things get worse in a world of chaos; cry for economic equality and fairness in taxing system is making the politicians to twist the economic system to their advantage and enhance electability to the public office. One of the common complaints is that rich are getting richer and they are paying less tax: This has a strange meaning and consequence because rich pay more taxes and increase the governmental revenue (see Table 7-1, and Figure 7-3.)

Monetary control by Federal Reserve to curb inflation, and lower taxes, provide a model for economic growth (see for example Figure 7-1) that emphasizes free-market capitalism as the engine of prosperity and not by government intervention. The four killers of economic prosperity are; trade protectionism, tax hike and reckless government spending, regulation (governmental intervention) as opposed to deregulation, and monetary control to Federal Reserve.

The first chapter provides a quick review of economic growth and prosperity from Reagan years to Clinton's presidency (chapters 5 & 6; also see Figures 5-1, Table 5-1, Figure 6-1,). The imminent economic danger includes; unemployment, lower wages, lower-housing prices, inflation, recession, and too much governmental intervention. The lower-income households are most affected by trade barriers and import-tariffs. Made in India, and China where the labor is cheap results in less cost to American consumers and hence can afford varieties of household goods and appliances. Global competition also keeps the prices down.

The benefits of lowering taxes include the take home wages for an average person is higher, and his spending and investing will be higher (see Figure 5-5), the government revenue is higher because of higher volume of spending by the consumer (Figure 3-1 to 3-3, Table 3-1). Lastly the rich and wealthy would like to invest at home where the tax policies are favorable (see Figures 5-2 and 7-2). When the investor-employers earn more, with less tax, the wages of their employees will rise. The impact of higher taxes and governmental intervention reduces economic growth (Figure 4-1), and deregulation has significant impact on prices (Figure 4-2). Impact of higher taxes is well discussed in chapters 4, 13 and 14: Chapter 14 also discusses the impact of increased regulation and anti-immigration policies on economic growth. The last chapter provides some sound advice on your personal investments for years ahead.

1. Supply Side Portfolio Strategies
2. Financial Shock: A 360 Degree Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis
3. The Legacy of Reaganomics : prospects for long-term growth
4. Reaganomics, Reagan's Economic Program (An Impact Book)
5. Supply Side Policies (Studies in economics & business)

Expert look at heated tax debate
Arthur B. Laffer, Stephen Moore and Peter J. Tanous give Ronald Reagan full credit for laying the foundation for decades of U.S. prosperity. They see today's government programs as a return to the worst of Franklin D. Roosevelt's New Deal and Lyndon B. Johnson's Great Society. The authors find it strange that the U.S. is adopting a more European model just as many European countries are moving more toward Reaganomics. They suggest a different path to good fortune: Get government out of the way of individual, entrepreneurial opportunity. If this reasoning persuades you, pay particular attention to their chapter describing how California, once the most prosperous U.S. state, became an economic basket case - a decline that the authors blame on the expansion of government spending, regulations and taxes. Laffer's advocates, including those who also favor a flat tax, see this book as an instant classic; his opponents have already dismissed it. getAbstract suggests it to those seeking a conservative take on current economic policy.