Bad Faith Economics

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TenBagger United States. Jan 27 2009 01:24. Posts 2018

http://www.nytimes.com/2009/01/26/opinion/26krugman.html?_r=1&em

Paul Krugman's Op-Ed article from today's NYTimes tackles an issue that has been hotly debated here on LP. There are quite a few Americans on this forum that favor tax cuts and Reaganite supply side economics as a solution to our current economic situation and dismiss pre-bush tax levels as socialism, even though it's still low by our own historical levels and extremely low compared to other industrialized nations. I strongly disagree with that point of view and Krugman's article is totally spot on with my own opinion.

Here is an excerpt:

Next, write off anyone who asserts that it’s always better to cut taxes than to increase government spending because taxpayers, not bureaucrats, are the best judges of how to spend their money.

Here’s how to think about this argument: it implies that we should shut down the air traffic control system. After all, that system is paid for with fees on air tickets — and surely it would be better to let the flying public keep its money rather than hand it over to government bureaucrats. If that would mean lots of midair collisions, hey, stuff happens.

The point is that nobody really believes that a dollar of tax cuts is always better than a dollar of public spending. Meanwhile, it’s clear that when it comes to economic stimulus, public spending provides much more bang for the buck than tax cuts — and therefore costs less per job created (see the previous fraudulent argument) — because a large fraction of any tax cut will simply be saved.

This suggests that public spending rather than tax cuts should be the core of any stimulus plan. But rather than accept that implication, conservatives take refuge in a nonsensical argument against public spending in general.

0 votes

ShadowDrgn United States. Jan 27 2009 03:14. Posts 1156

On January 27 2009 00:24 TenBagger wrote:
because a large fraction of any tax cut will simply be saved

What? No one in the US saves anything. I really hate Krugman's "preaching to the choir" op-ed pieces. I don't agree with him on everything, and he writes in such a way as to inflame the opposition rather than articulate his reasoning.