Voodoo That I Don’t Do
If you want to cut taxes and say you prefer them to increased spending, fine. But let’s not act like tax cuts reduce the deficit. They don’t.
When I say economists and policy makers abuse economic ideology for political purposes, this is what I’m talking about.
Hat tip Andrew Samwick.
If tax cuts don’t reduce the deficit, then spending increases don’t either–in which case we agree about Keynesian multipliers. However, it seems from the clip that a multiplier effect is exactly what some the supporters of tax cuts have in mind, whether they understand it or are willing to admit it. Since even Art Laffer is quite comfortable with Clinton-era rates, I would hope anyone inclined to slip in that deep voodoo would give him a ring first to spare themselves the embarrassment.
Somehow they must cut off the deficit in taxes if they want to curb their expenses.
please don’t encourage Maddow when she uses a clip from Bush senior, a decent guy but an economic ignoramous….
agreed, however “economic ignoramous” could be used to describe just about anyone of our current/former presidents, vice presidents, senators, congressman, etc.
Good move on Maddow’s part to not include Obama on her “deficit increase” chart. 12% of GDP here, 12% of GDP there- soon you’re talking about real money.
As for tax cuts never working I’ll try to get the word across the river to Mr Putin. Back in the late 90’s the top tax rate in Russia was 45%… let’s review “how that worked out last time” in the words of Senator Merkley.
Oh, and let’s not cut taxes so we can put the USG in the lending business. Okay then.
In the short term, I think it depends on both the tax rate and the multiplier. If the tax rate is 50% then you would only need a multiplier of 2 in order to break even. Of course where does the additional tax revenue come from. If it comes from sales tax, then you need a higher multiplier because sales tax is usually a lower percentage then income tax. However, in the long term cuts are required because as demand increases so will the wages which public employers will ask for.
right, tax cuts don’t lower the deficit. however if there is a deficit , shouldn’t we (the taxpayers) be allowed to spend OUR OWN money how we see fit (as opposed to clowns such as barney frank)? anyone here ever read any Milton Friedman????? congress spending OUR money leads to malinvestment. you spending your OWN money leads to resources being being efficiently allocated. pick up some Thomas Sowell on your way to the libarary as well.