AEIdeas

The public policy blog of the American Enterprise Institute

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Discussion: (10 comments)

  1. And sixth, Romney might be planning to bend over and pull a magical pony out of his rear which flies around giving wealthy business owners so much money that they’ll gladly hire employees they don’t need and buy inventory they can’t sell, just to get rid of the extra cash.

    Because after all, the real problem we’re facing is shortage of demand because consumers don’t have enough money to spend, and it’s entirely foolish for businesses to increase production or hire more employees if they don’t have customers to sell to. I mean, duh. Not to insult anyone’s intelligence here, but even a child running a lemonade stand knows that if you don’t have any customers you shouldn’t be buying more lemons.

    If you want businesses to spend more, consumers will need more money to give them. That ain’t rocket science. If you want the economy to improve, it’s workers who need more money, not millionaire business owners. And once they get the money, they business owners can earn the money, just like everyone else.

  2. It’s worth noting that the “current policy” baseline is ridiculous and partisan. They uses the Obamacare taxes that aren’t being collected yet as part of the “current policy”, and since those are significant and fall only on high incomes, removing them has predictable distributional effects. It’s worth noting that they didn’t play that game when Bowles Simpson was analyzed. Presumably they will worry about their reputation next year.

  3. Moderate Conservative

    Yet more pathetic hackery from a faux conservative (anyone who purports to peddle the trash that Pethokoukas does here is no “conservative” by any reasonable meaning of the word).

    The Tax Policy Centre also ran the numbers with fanciful supply-sider projections. No material difference.

  4. hey biobrain, how exactly do you propose the consumers get more money? free enterprise was based on people taking a risk with their own money and reaping the loss or rewards. America didnt automatically give all their citizens some money to start buying thing in 1776. rich people and entreprenuers started businesses and hired people and those people then bought things from others. capitalism is a beautiful thing when unencubered by meddling governments.

    1. Andrew J. Lazarus

      The government bought (or stole) land from the Native Americans and gave it to homesteaders free, or nearly so. That’s just one example.

      You might also consider the many recessions and panics (as they used to call them). With all its problems, the current system seems better.

      People like you, seek, never consider that they were the ones wiped out in the past. It’s like how “Past Lives” kooks are always re-incarnated princesses, never scullery maids.

      History and libertarian theology don’t always mix well.

    2. Moderate Conservative

      Evidently you know nothng about capitalism. You might want to crack a book and gt yourself up to speed. Better yet, spend a day in the business world.

      1. been in business for nearly 30 years have several businesses i started myself with my risk. did not start them based on consumers getting more money but based on my ability to provide a service better than anyone else in the market. it works. but if you’ve never been there you will never understand aka mr. obama.

        1. Moderate Conservative

          SEVERAL!! You started “several”. LMAO! You give yourself away right there, my friend aka colossal internet phony.

          Lemonade stands and one-man “consultancies” that you “started” after you got canned don’t count, by the way.

          If there is not a demand for one’s product, or if demand is not strong enough to absorb the supply of more goods and services, the economy does not benefit.

  5. Vitaly Furman

    This is precisely the problem with Rowney’s campaign: it needs to be more specific. The author basically agrees with the main conclusions of the study, with some reservations. Romney has exactly three weeks to lay out a specific plan of how he is going to reform the tax system. If he doesn’t do that his tax cut will be defined by Obama as a tax increase on the middle class.

  6. Andrew J. Lazarus

    Nobody who isn’t paid to say so believes that our current tax rates are on the “wrong” side of the Laffer Curve. What happened when Clinton raised tax rates: a boom and a surplus. What happened when Bush-43 lowered them? Recession and deficits. (Revenues also went down, alarmingly, after the Reagan tax cuts, causing him to reverse course and raise some taxes back again.)

    At what point do we recognize that the Magic Asterisk of massive growth through tax cuts is, as Bush-41 realized, voodoo? It doesn’t happen.

    Unless the cynics are right, and the point is not the revenue that never comes, but deficits so scary that they lead to the elimination of Social Security, Medicare, and everything else except the military, and maybe aid to Israel?

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