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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: Little Joe who wrote (96567)4/17/2009 11:44:17 AM
From: koan  Read Replies (2) of 116555
 
>>
If you are right wouldn't huge tax cuts be the answer. No political opposition and money gets into the economy, with the added advantage that it is likely to be spent to make us more productive.<<

Most economists say tax cuts do not work as people just save the money or pay down debt. If no one is spending business's have no business and also so not need tax cuts. No revenue no taxes anyway.

Business's right now need business. That means spending.

Think about it. In WWII everyone in the nation who could work could get a good paying job. Everyone was working. Men and women. So everyone had money to spend and pay down debt.

This spending caused businesses to grow strong and new businesses to spring up, and a whole new infrasturcture was created which led to the prosperity of the 50's, 60's.

It also created huge tax revenues which the government used to pay down the national debt.

On Kugman's home page he has a graph which shows this is ecactly what happened. By 1950 personal debt was very low and government debt had fallen greatly.

Bush enacted huge tax cuts and few jobs were created. Clinton created 22 million jobs while bush created about 4 million, I think. And clinton raised taxes.

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