Steven Landsburg tries to guide the Super Committee with a little "common economic sense"- explaining in a different way my views on Wealth Consuming and Wealth Producing. Note the penultimate paragraph where he explains the Government can TAX (Wealth Consuming) or can "earn more income" (Wealth Production).
The former is a disastrous mistake in a weak economy! And is abused in a strong one!
I am a very literal reader, and so I like to look at the words people use - I think word choice matters.
ReplyDeleteSo in this article I find it interesting that Landsburg states the second option for the government as: "B) Collect more tax revenue." He rejects this option, but seems to equate 'more tax revenue' with raising tax rates.
Even Keynsians would not argue for raising tax rates in recessionary times.
But there's another way we collect more tax revenue, which is when the economy is more active. As we saw in the nineties, as the economy grows the amount of tax collected also grows, and G.W. Bush inherited a situation that seemed to be pretty "fiscally responsible" in the sense that there was a yearly surplus.
Bush then pushed big tax cuts, in part arguing that this would help in the minor recession of the early 2000s. And ever since we seem to be stuck in a pattern of ever larger deficits (i.e. fiscal irresponsibility).
The question at this point is how we get out of the pattern. Part of the solution is surely to cut wasteful spending ('waste' being in the eye of the beholder however). But ideally we'd figure out a way to help get the economy recovered to a level that would finance the "wealth consuming" activities that we decide are most important.
Raising tax rates and collecting more revenue are equivalent when you refuse to put pro growth policies into place - would you argue Obama et al do want to put pro growth policies in place?.
ReplyDeleteYou must think that Obama et al are not Keynsians - they certainly want to raise taxes!
I think you would agree they are - so I guess you are in agreement with the GOP. So why not support the House efforts and Paul Ryan's plan to implement pro growth policies, instead of making an ass of yourself as Obama did in his public repudiation of Mr. Ryan?
What I meant in the last sentence of the above post is that Obama made an ass of himself repudiating Mr. Ryan, not that Curt is making as ass of himself.
ReplyDeleteYou would never do that! And since you take words very seriously I thought I better correct my sloppy writing!!!