A friend of mine posted the following chart on Facebook with the caption: “Clearly lower taxes isn’t the cure.”

Sorry the graph gets cut off. In case you can’t tell, the red line is the supposed effective tax rate of the rich, and the blue line is the unemployment rate

My first obvious thought is that correlation does not equal causation. It’s obvious that cutting taxes do not cause unemployment. But which angle(s) should I take; regulation, business cycle, interest rates, debt, unemployment benefits, minimum wage…? Also, I’m not sure I believe the chart. Does any…

Well you have the right idea. Because economic science is not positivistic, data can be made to say anything if you torture it sufficiently. This means, however, that you can’t really use data youself as proof of what you are saying, but merely (if at all) to illustrate the theory. The illustration …

I’m certainly no expert in economics, but my common sense approach says we need more details. It seems like it might be a span of 10 years? Is it a national demographic? How did they get the results? It could be a similar logical process to the Obama administration “saving or creating 2.5 million jo…

http://www.americanthinker.com/blog/2009/09/graph_of_the_day_for_september_9.html Taxes were lower when they were higher.

Well, first of all, the figure for unemployment is pretty inaccurate: 1995 5.59 1996 5.41 1997 4.94 1998 4.50 1999 4.22 2000 3.97 2001 4.74 Bush, G.W. 2002 5.78 2003 5.99 …

Well, at least we know now where he got it from .

Anyone want to help me debunk this???

Economics Economics Questions

John_James May 17, 2012, 10:39pm 8

Just send him this, along with the comment “clearly, fewer pirates isn’t the cure.”

http://en.wikipedia.org/wiki/File:PiratesVsTemp%28en%29.svg

The Earlier You Abandon The GOLD STANDARD and Start Your NEW DEAL, the Better

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Anyone want to help me debunk this???

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