And on Fox News, Forbes calls for lower taxes, plus sound money and spending restraint.
The progressive bandwagon advocating jobs not austerity is picking up steam (Mother Jones, Ezra Klein, George Soros, Robert Reich and The Nation).
The Tax Foundation analyzes lower tax rates on dividends.
While the Republican House leader's office argues the President should "cut spending now to create jobs and help our economy."
Much as some political leaders in the past have overstated the case when claiming tax cuts pay for themselves, perhaps now they are confusing evidence, like this study from Mercatus, that spending isn't effective stimulus as meaning that spending cuts therefore are stimulative.
Sean,
ReplyDeleteJust a note of thank you for maintaining an excellent blog. You find SSE-related articles in places I would never think to look. This site is a very valuable resource. Keep up the great work!
To be fair to Congressman Boehner there is no quote of him saying "cut spending now to create jobs and help our economy," but it was stated twice in his Leader Alert.
ReplyDeleteSpending cuts will not create jobs. To create jobs our economy must return to economic growth, but that will only come if the private sector is released. We must have a reduction in tax rates and a reduction in regulations that are suffocating job creation. Spending cuts do neither.
The IMF's basic policy prescription is to devalue a currency, increase taxes, and reduce government spending. This is a recipe for disaster. Debasing the currency hurts every person holding currency and that is primarily the poor of any country. It will effectively reduce government debt but at the expense of the people.
Most understand that raising taxes pulls vital sources of capital from the private sector and dumps it into the public sector where 2/3 is wasted in overhead.
Finally, what of spending cuts? Spending cuts alone are destructive. They reduce consumption of private sector production, they reduce the pay of government employees, or even cause unemployment of government employees. Many people mistakenly believe that spending cuts will result in tax cuts but that is not necessarily the case. They also believe that spending cuts will mean more capital for the public sector but that also is not necessarily the case.
Spending cuts are only good when government divests itself of activities that can be done better in the private sector. Spending cuts should only be done when the activities being supported by the spending are shifted to more efficient producers.
Congressman Boehner would do us all a favor if he would switch his rhetoric to supply side issues. He should call for tax cuts, for a stable currency, and for the government to return GM and other businesses to the private sector and he should call for disbanding wasteful Departments such as Commerce, Education, and others. After this is done and the budget inevitably moves toward surplus, he could call for spending cuts that, rather than adding to our economic problems, would return the surplus to the people.
Dick, you're correct. The release summarizes Boehner as saying what I quoted, but it wasn't from his lips. I've edited the post accordingly. Thanks.
ReplyDelete