The Logo
The Logo · Jun 26, 2010 at 2:34pm

Via Wall Street Journal

We Can't Spend Our Way to Prosperity 

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show Pat's comment (#1) ←
Pat in Obamaland
Joined
May '10

Re: The Keynesian Dead End

Pat

But like the cicada, the next brood of Keynesian economists will awaken in 17-years to gorge themselves, buzz loudly, and die shortly.

show ~Paules's comment (#2) ←
~Paules
Joined
Jun '10

Re: The Keynesian Dead End

~Paules

Nice metaphor, Pat.

I can predict with fair accuracy their next brilliant idea having just returned from a town hall meeting sponsored by "America Speaks." The event was billed as non-partisan, but the attendees were by a fair percentage mostly liberal. We're about to see proposed tax increases across the board of 1.2 billion dollars to cure the deficit.

The liberals are clever. They intend to offer America a list of false choices. Example: Which of the following deductions would you eliminate in the tax code to bring down the deficit?

A. Cap itemized deductions at 28%

B. Modify the mortgage interest deduction.

C. Limit deductions for state, local, and real estate taxes.

D. Limit corporate deductions for depreciation.

Given 42 questions and 75 minutes my table of three liberals, one moderate, and one conservative cured the budget crisis! There is nothing a liberal enjoys more than raising taxes on someone else.

I had to abstain on every vote because choices like "grow the economy" and "eliminate capital gains taxes" appeared nowhere on the questionnaire. My complaints that eliminating deductions is a tax hike in disguise went largely unanswered.

show ~Paules's comment (#3) ←
~Paules
Joined
Jun '10

Re: The Keynesian Dead End

~Paules

Sorry, that would be 1.2 trillion in tax increases.

→ show Rob Long's comment (#4)
Rob Long

Re: The Keynesian Dead End

Rob Long

Terrific (and somewhat hopeful) closing graff in that WSJ piece:

What the world has now reached instead is a Keynesian dead end. We are told to let Congress continue to spend and borrow until the precise moment when Mr. Summers and Mark Zandi and the other architects of our current policy say it is time to raise taxes to reduce the huge deficits and debt that their spending has produced. Meanwhile, individuals and businesses are supposed to be unaffected by the prospect of future tax increases, higher interest rates, and more government control over nearly every area of the economy. Even the CEOs of the Business Roundtable now see the damage this is doing.

A better economic policy will have to await a new Congress, which we hope at a minimum can prevent punishing tax increases. But for now the good news is that voters and markets are telling politicians to stop doing what hasn't worked.

I love those words: "...await a new Congress."

show Michael Labeit's comment (#5) ←
Michael Labeit
Joined
May '10

Re: The Keynesian Dead End

Michael Labeit

The methodological empiricism embraced by most Keynesians allows them to argue that "what may have failed yesterday may succeed today." Keynesianism will make a comeback, unfortunately.

show Pat's comment (#6) ←
Pat in Obamaland
Joined
May '10

Re: The Keynesian Dead End

Pat

Rob, at this point those may be the four most beautiful words in the English language.


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