Blind to (or simply ignorant of) the empirical evidence, ideological conservatives insist that tax cuts to the rich always creates [at least] long-term savings & investment; some even still cling to the notion that they do so even in the immediate & short terms. In turn, they believe, this will create sufficient economic growth to provide a better outcome for society relative to alternative tax policies (i.e., maintaining or raising taxes).
In this blog posting, Matthew Yglesias lays out succinctly why this is simply not true. 'Nuff said.
Matthew Yglesias » Extending Bush’s Tax Cuts for the Rich Won’t Boost Savings and Investment: "- Sent using Google Toolbar"
There is a rebuttal comment by zosima at the end of the blog posting that claims Yglesias is wrong because [zosima thinks that] Yglesias "is taking a study that tax cuts *didn’t* boost investment as evidence that it *can’t* boost investment." That's funny: I thought Yglesias was only saying that tax cuts don't *always* boost investment?
Hey, whaddya know?!? That's exactly what Yglesias was saying, and so zosima's rebuttal falls flat, at least on that point.
zosima's remarks [in another, earlier comment to Yglesias' post] about Say's Law and the Treasury View are more nuanced (complete with reference to a Paul Krugman blog post), and require a lengthy discussion & analysis... Hmmm... I think I have a future blog topic...
We won't even mention that if conservatives insist on coupling tax cuts with simultaneous deficit neutral spending cuts in order to obtain their desired long-term growth & investment (and, not coincidentally, even greater income disparity between the wealthy & the rest of us), then the immediate to intermediate impact is going to be a fairly dramatic additional drag on GDP & jobs, as government spending & employment rolls are pared back to pay for the tax cuts.
ReplyDeleteI thought they were supposed to be all about jobs?
And, of course, we can't even talk about what happens to the bottom 14% of the country who are living below the poverty line & rely upon social insurance programs. I guess we're supposed to just let them eventually just die off over the long term?