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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: TimF who wrote (360465)	11/27/2007 7:00:46 PM
From: Road Walker	Read Replies (3) \| Respond to of 1573135

Both borrowing and taxing remove money from the private sector and put downwards pressure on economic growth. So the removing money from the private sector factor is pretty much equivalent for both. Data? Are you making that "equivalent" up? But beyond the loss to the private sector of the money spent by the government you also have the dead weight loss caused by the distortions and perverse incentives of the way the revenue is raised, and by compliance costs, both of which are lower for borrowing, so within limits, unless your tax system is very simple and non-interventionist, you can get more economic growth from tax cuts even when you are running a deficit. Most of the benefit of the tax cuts is lost, but not all of it. It's funny to watch a self proclaimed libertarian twist logic like a pretzel to support deficits. One important consideration is how federal income relates to current and future federal spending. To the extent that reduced federal income leads to containment of federal spending then tax cuts are more beneficial. I think many Republicans have exaggerated this effect, but I do think it does have some impact, even if not as strong, and certainly not as immediate as some would argue. LOL. It certainly hasn't had an impact on the profligate spenders. And what if you HAVE to spend, on infrastructure or a real war? Budget deficits are really bad for the economy. The twin deficits are a killer. Look at the dollar. It you could carry Ron Pauls intellectual jock strap you would be screaming bloody murder right now.