Who better than Arthur Laffer (of Laffer Curve fame) to explain the worthlessness of the tax rebate stimulus package that Congress and the Bush Administration cooked up to "cure" what supposedly ails our economy. Well, Mr. Laffer goes in to great detail on tomorrows Wall Street Journal editorial page explaining why the net effect of the tax rebates will be - zero.
The FDC has potificated on this subject before here and here. And as with the last post on the congressional ethanol mandates, the tax rebate stimulus package is more about politics than practicality.
Showing posts with label stimulus package. Show all posts
Showing posts with label stimulus package. Show all posts
2/12/2008
1/30/2008
More ideas from Congress to "stimulate the economy"
Well, this idea couldn't be much worse than some of the others. As reported by America's Finest News Source.
1/18/2008
Feel-Good Economics
Writing in the Wall Street Journal today, Bruce Bartlett agrees with The FDC that President Bush's proposed $800 tax rebate will do little if anything to "stimulate" the economy.
Now, don't get me wrong. I want to keep more of my money, and I like the idea of the government giving it back to me. Honestly, I wish they'd give me back even more. But, I don't have any hope that these one-time cash hand-outs will do what they are intended to do.
Bartlett also brings up Milton Friedman's concept of "permanent income" which we posted about in this space (see FDC post 1/15/2008). In short and $800 check isn't permanent income, but an immediate, permanent, marginal tax rate cut does increase permanent income, and would stimulate the economy. It's not only the immediate $800 (or whatever your tax savings may be) in your pocket, but the knowledge that the same thing is going to happen again, and again, and again is what spurs consumers to actually spend the money, rather than save it, or pay down debt.
Now, don't get me wrong. I want to keep more of my money, and I like the idea of the government giving it back to me. Honestly, I wish they'd give me back even more. But, I don't have any hope that these one-time cash hand-outs will do what they are intended to do.
Bartlett also brings up Milton Friedman's concept of "permanent income" which we posted about in this space (see FDC post 1/15/2008). In short and $800 check isn't permanent income, but an immediate, permanent, marginal tax rate cut does increase permanent income, and would stimulate the economy. It's not only the immediate $800 (or whatever your tax savings may be) in your pocket, but the knowledge that the same thing is going to happen again, and again, and again is what spurs consumers to actually spend the money, rather than save it, or pay down debt.
1/15/2008
"...politicians have predicted nine of the last five recessions."
So says the National Review's editorial today.
And eventually the politicians will get it right. So, just in case they do get it right, something must be done, and since we are in the midst of a presidential primary...let the cash hand outs begin!
The National Review's Rich Lowry gets it right on these so-called "stimulus plans" to "jump-start the economy". The FDC loves that Lowry cited Milton Friedman's (one of our heroes) "permanent income hypothosis" that Lowry boils down to: "You can’t fool people into thinking that they are richer than they really are. "
Meanwhile, it should come as no surprise that New York Times columnist, Paul Krugman, praises the hand-outs. Krugman disregards the lessons he learned earning his undergraduate economics degree at Yale and his Ph.D. at MIT, to wallow in what Lowry calls the "the lowest common denominator of sophomoric economic policy".
And eventually the politicians will get it right. So, just in case they do get it right, something must be done, and since we are in the midst of a presidential primary...let the cash hand outs begin!
The National Review's Rich Lowry gets it right on these so-called "stimulus plans" to "jump-start the economy". The FDC loves that Lowry cited Milton Friedman's (one of our heroes) "permanent income hypothosis" that Lowry boils down to: "You can’t fool people into thinking that they are richer than they really are. "
Meanwhile, it should come as no surprise that New York Times columnist, Paul Krugman, praises the hand-outs. Krugman disregards the lessons he learned earning his undergraduate economics degree at Yale and his Ph.D. at MIT, to wallow in what Lowry calls the "the lowest common denominator of sophomoric economic policy".
Subscribe to:
Posts (Atom)
