tag:blogger.com,1999:blog-379856994574950364.post9183115286798117212..comments2023-08-25T08:45:09.672-04:00Comments on The Supply Side: Austerity stimulus?Unknownnoreply@blogger.comBlogger2125tag:blogger.com,1999:blog-379856994574950364.post-1941154962973008692010-06-22T22:23:04.328-04:002010-06-22T22:23:04.328-04:00Bob--
Tamny is no doubt correct, but I don't s...Bob--<br />Tamny is no doubt correct, but I don't see high federal spending as the reason investors are sidelined and unemployment is high. Stabilize the dollar and keep taxes low, and plenty of capital will become available for private purposes. <br />Without those supply-side fixes, deep spending cuts -- especially in the social welfare arena -- while technically correct, likely will cause civil unrest and derail larger reforms. As a result, voters will hedge by not giving spending cutters an outright majority, leading to the type of incoherent muddle we now see in Britain. <br />Better to restore growth and prosperity first, then focus on spending cuts when the public is more economically secure.Sean Rhttps://www.blogger.com/profile/12680088090385430339noreply@blogger.comtag:blogger.com,1999:blog-379856994574950364.post-34520465077799644142010-06-22T21:52:48.799-04:002010-06-22T21:52:48.799-04:00Sean,
Given how simply out-of-control government s...Sean,<br />Given how simply out-of-control government spending is on the federal, state, and local levels, couldn't a reasonable case be made that spending cuts would be stimulative? Here's my simple reasoning (with a HT to John Tamny): Limited capital that had been sucked up by the public sector is now made available to the private, productive sector. The private sector can then use that capital to expand by making investments in both labor and productivity-enhancing capital equipment. Of course, in combination with sound money and pro-growth tax policy, this would be a huge boon to the economy. As Tamny has emphasized in the past, government spending is just another form of taxation. Reduce the burden of taxation (spending) and you increase the incentive to invest/work.Bob Landryhttps://www.blogger.com/profile/12916192435227770327noreply@blogger.com