Sigh, WaPo has an article critical of the fiscal cliff deal. To be sure, there’s much to criticize. And, for a little as the writer offered, I think the idea he was trying to convey was almost accurate. …… not quite, but there’s only so much one can expect from leftist groups.
I was going to make this part of a larger post, but I’m battling time, again. Still, this could be fun. Some excerpts from the article…..
Economists generally offer three theories for what’s hampering the still-sluggish U.S. economy: the Keynesian theory, which would like to see lower taxes or more government spending; the spending/debt theory, which would like to see both of those reined in; and the uncertainty theory. Under none of them can the deal to avert the “fiscal cliff” be considered an economic success.
Sigh, Keynesians like lower taxes? Can someone point me to a Keynesian that advocates lower taxes in the real world? And then there’s the “spending/debt theory” and the “the uncertainty theory“. The author probably learned this from a technical writing class or something……
The deal will not inject more consumer spending power into the economy this year compared with last year — in Keynesian terms, it does the opposite. It won’t reduce government spending, and it will boost the national debt by trillions of dollars compared with what would have happened if lawmakers had not reached a cliff deal. It resolves only a slice of the policy “uncertainty” that many business leaders say is chilling investment in America.
It isn’t just in Keynesian terms, in fact, it’s a bit disingenuous to credit Keynes with the thoughts of injecting more spending power into the economy. Keynes advocated govt spending to do so. The fiscal cliff deal had little to do with that. But, the point is valid…. there is less spending power, the debt will continue, (likely a deal will be made moderating the spending cuts kicked down the road in the deal) and there is still a lot of uncertainty which hampers business activity.
Then the writer falls off the rails with this ……
From the Keynesian perspective held by many Democrats, it won’t stop a 2 percent jump in payroll taxes, which will sap almost as much consumer demand as extending middle-class tax cuts will preserve.
Yes, many Dems are from the Keynesian school of thought. Their advocacy for lower taxes is well known. We all know it is non-existent.