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Politics : PRESIDENT GEORGE W. BUSH -- Ignore unavailable to you. Want to Upgrade?

To: DuckTapeSunroof who wrote (746999)	8/4/2006 2:56:37 PM
From: TimF	Read Replies (1) \| Respond to of 769670

So you understand the Treasury's point... and how failing to cut spending has sabotaged the benefits we should have received from lower tax rates.... The majority of them. Re: "If you are considering "government economic policy as a whole", than you can't draw any meaningful conclusions about the effects of tax cuts based on your considerations." Sure I can: Tax cuts (as a rule) are always good things. But running unbalanced budgets can easily throw away the expected economic benefits of low rates. Running unbalanced budgets is not just an effect of tax cuts. Its not that spending remained the same but revenue dropped through tax cuts so you have a deficit. Spending jumped upwards in leaps and bounds. That upwards jump is NOT an effect of the tax cuts, and its effects can not reasonably be blamed on the tax cuts. Cutting taxes (thus: revenue), while maintaining & even increasing* the rate of deficit-financed spending, is a losing proposition if the goal is to maximize long-term economic growth.* Increasing spending is itself a losing proposition if the goal is to maximize long-term economic growth. Plug in that "even increasing" and you screw up the argument by conflating independent variables. You could assert that leaving spending entirely unchanged while you cut taxes exerts a negative effect on long term economic growth but it that is what you are trying to assert than you will have a much tougher job. Also if that is what you are asserting you should make it clear, tossing in increases of spending does nothing to make your case. The spending increases are a red herring when considering the issue of whether tax cuts with no spending changes can help economic growth.