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Politics : View from the Center and Left
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To: Steve Lokness who wrote (103219)2/5/2009 12:28:43 PM
From: TimF   of 542442
 
I too think there are too many tax cuts - but I realize that if there is any hope of getting a bill through the Senate, we're going to just have to accept them.

In terms of the economic results the way most of these tax cuts are set up, they are the same as additional transfer payment spending. Little or no change in your marginal rate on your next dollar, just a check from the government (even if its a tax return check).

If the point is that you believe that you don't get much stimulus out of this (I believe that's one of Krugman's points at least), then you also shouldn't get much stimulus from transfer payments. The argument for both points, being that people won't go out and spend the money, so you should have government spend it on something instead. That government will actually hire workers and buy things.

The problem for timely stimulus is that the fastest forms of stimulus are tax cuts, and transfer payments. Sizable additional government purchases often take a long time to get rolling (esp. if 1 - We don't waive environmental, labor, notification/comment period, and program control rules that slow things down, and 2 - We want to get something useful for the money, not just toss money all over the place without thought).
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