In our completely connected, 24/7 news, internet world I'm finding it harder and harder to come up with original ideas for blog posts. It's not that I'm suffering from writer's block or that that the news each day doesn't lend itself to stuttering rants. It's just that as soon as I get the idea for a post the same idea starts to magically pop up all over the web. Case in point:
A table in last Thursday's USA Today (from Moody's Analytics) showed clearly how much a Federal dollar injected into the economy returns in economic growth. Here's a scan of the table.
Now, as anyone who can, you know, read can see, spending Federal dollars into the economy at the bottom by way of extending unemployment benefits or an increase in food stamps or even our old favorite, increased infrastructure spending (can you say "shovel ready") will do more for the economy than ANY of the tax cut types presented in the table. The comparison with permanent tax cuts is particularly informative.
So why does it matter, you ask? Because our learned political leaders from the GOP are once again (or still) going on about how tax cuts are always better for the economy. They also always make the point that tax cuts increase tax revenues. No, I'm not making that part up. Conservatives have for some years now relied upon something called the Laffer Curve to justify never raising, and always lowering, taxes. Click the link for a definition. The basic idea is that at a certain economic point an increase in tax rates will cause changes in economic behavior such that tax revenues will actually go down. Of course, the curve has two sides. The believers in this fairy tale never seem to look at the side that says an increase in tax rates will result in an increase in revenue. They just get up on their hind legs and go on about taxes taking away our liberty and the conversation tends to end.
Well, I was going to go into chapter and verse on this issue when a posting by former Bush administration member Bruce Bartlett stopped me cold. He got there first. This post is worth a read. It lays out the thoughts of some GOP and conservative economists who call the Laffer Curve assertions the A-1 prime BS that it is.
So the question we must ask is, what can we do about politicians who spout off about ideas that just are not true? Throw all of the bums out? The trouble is, some of the new bums believe this crap too. And don't get me started on the press!
Note: I would really love to hear from my conservative readers on the Laffer Curve issue. A good conversation is never a bad thing.