Amity Shlaes's The Forgetten Man

[Phaeton]

Hold up...what I learned in basic econ:

If you tax and raise government spending by the exact same amount, you will have a net increase in GDP because of how the tax multiplier and government spenidng multiplier work. Up to a theoretical point where the market doesn't want to deal...

So if we are raising spending...what's wrong with increasing taxes a bit?

Doesn't government debt have economic consequences as well?

[keith]

Doesn't government debt have economic consequences as well?

Well I thought Reagan demonstrated that deficit spending is the only way to true prosperity?


Amity Shlaes wasn't the only one who was lucky enough not to have to sit through econ101

[Sins of the Fleche]

So if we are raising spending...what's wrong with increasing taxes a bit?

Doesn't government debt have economic consequences as well?

Phaeton, you've pointed out a sound economic principle. The trouble is, the government has decided to go into tax-and-spend mode right as alot of people are having trouble finding jobs or have less disposable income.

You are correct in that increased taxing to cover increased expenditure is the most logical course of action, but what I and others question is the logic of the increased expenditures in the first place.

[Inquartata]

If you tax and raise government spending by the exact same amount, you will have a net increase in GDP because of how the tax multiplier and government spenidng multiplier work. Up to a theoretical point where the market doesn't want to deal...

If that magic trick worked, every country would do it and prosperity would increase to infinity...

The short serious answer is that it's more complicated than that. The range of possible sorts of spending is large, and so is the range of types of taxation.

So if we are raising spending...what's wrong with increasing taxes a bit?

Because the idea behind increasing spending is to stimulate growth in the private sector, and taxation works against that.

Doesn't government debt have economic consequences as well?[/QUOTE]

Yes, but none have ever been identified at the levels of debt held by any nation in the world. That is, the effects are purely theoretical even at levels much higher than ours are expected to reach in the next decade.

[jessicasimpson]

Yes. Which is why we might try filling those unwanted jobs with legal immigrants.

Clearly a lot of people want to come here for a better life. I think we'd have better luck legally and culturally if we made it easier for the ones who would like to come legally. There's a ripe target for reform, if anyone is looking for one: immigration policy.

This would also increase the amount of taxpayers, which would increase revenue without raising rates. Also do not worry, I just wrote my final check for $1400 to immigration, so that will get fixed now that I am done with it. After all, the cash for clunkers got anounced 2 days after I traded in my Buick V-8 (mpg-9) for a Honda

[Inquartata]

See, that is the sort of luck the Republican fates have in store for liberals. Change your philosophies and affiliation and soon all that will amend itself.