Christina Romer, the out-going head of the Council of Economic Advisers, which sounds impressive until you realize they are just three dopes who give advice to Obama in the White House, has written an op-ed piece in the Orange County Register, in which she argues against tax cuts for all those evil, rich people in America because the government needs all that money to spend on useless programs..., but wait! I'm getting ahead of myself here. Read it for yourself then read my "expert analysis" in bold print-cuz I'm a bold guy.
http://www.ocregister.com/opinion/tax-266291-cuts-income.html
Now look here, Chief, I ain't no economic expert, but I do see some glaring flaws in Romer's article.
"First, extending the high-income tax cuts would provide very little job creation in 2011. There is widespread agreement that the short-run economic benefits of high-income tax cuts are small. The Congressional Budget Office lists a tax cut for high-income earners as a particularly ineffective job creation measure. Private sector forecasters have reached the same judgment. The vast majority of economic research shows that higher-income earners spend less of a tax cut and so tax cuts to those earners create fewer jobs throughout the economy."
Here Romer concedes that tax cuts for the wealthy (you know, those evil, greedy people who create jobs and run big (bad) businesses) would create some jobs. Then she engages in that journalistic trick of mentioning "private sector forecasters and the "vast majority" of economic research. Excuse me, Madame Romer, which private sector forecasters are you talking about, Joe the bartender down at the corner tavern? And what majority of economic research are you quoting here? That sounds like Al Gore telling us that the scientific debate (on global warming) is settled. It also reminds me of those medicine ads you see on TV:
"Recent studies suggest that Regurgitol may decrease the chances of dropping dead on the street."
"The view that tax cuts focused on the middle class can be important to the recovery is consistent with a wide range of research, including a paper that I wrote with David Romer before coming to government and that was recently published. This paper showed that tax changes in the postwar United States had larger short-run impacts on output growth than previously believed. Since most postwar tax changes have been broad-based, our evidence indicates that broad-based tax cuts have large effects."
And who is David Romer, by the way? Why he's the world-renowned husband of Christina, that's who. Their paper was recently published? So what? Mad Magazine is published every week. And how much relevance does a post WW II study have when it comes to the question of tax cuts for everybody 60 years later?
"But it's important to note that our study did not distinguish among tax cuts for different groups and did not focus on high-income earners. Thus, it provides no basis for doubting the compelling evidence that tax cuts for high-income earners are less effective than broad-based tax cuts focused on the middle class."
Really? So because their study was less than detailed and complete, that proves her point about tax cuts for everybody 60 years later? Expain why your evidence is "compelling".
"Likewise, estimates by the Council of Economic Advisers suggest that spending $10 billion to prevent the layoffs of teachers, firefighters and police would lead to nearly twice as many jobs as the estimated $30 billion of high-income tax cuts.."
Regurgitol from 3 dopes in the White House.
"Take this. It's good for ya."
"In its third quarterly report to Congress on the American Recovery and Reinvestment Act, the Council of Economic Advisers estimated that the tax cuts and other income support provisions in the Recovery Act saved or created more than a million jobs just through the first quarter of 2010. The evidence from my work with David Romer implies that the Making Work Pay tax credit may have been even more effective than conventional estimates indicate."
More Regurgitol from the 3 White House economic hacks. "Saved" or "created" jobs. Like census takers, for example?
"Extending them permanently would add about $700 billion to the 10-year deficit. That is a cost that we simply cannot afford, particularly for something that does so little to aid our recovery."
What she is saying here is that big, bloated government needs that $700 billion to spend on its programs. I say let the government do without the 700 billion.
What Romer is doing here is trying to confuse the reader with all these terms like "imply", "suggest", "may", "estimate" etc. while referring to unnamed studies. I still believe in that antiquated little theory that if all people-including wealthy people- get to keep more of what they earn, they will spend it, both on themselves and their businesses and hire more people. When it goes to government, they will, spend it on useless programs and entitlements targeted to certain groups.
But what the Hell do I know? I would just like Romer to be a little more specific.
* Don't take Regurgitol if you are over 25, pregnant, nursing or suffering from depression, ulcers, sniffles, sore throat, or cold. Regurgitol has been known to cause severe depression or thoughts of suicide in patients between the ages of 5-94. May lead to bleeding in the bowels, heart attacks, stroke, liver failure, kidney failure, flatulance and hair loss. Males should not take Regurgitol. Don't take while driving, operating heavy machinery, walking the dog, washing the dishes, vacuuming the floor or talking on the telephone. Don't even think about having sex while taking Regurgitol. A recent study by the Council on Economic Advisors suggests that taking Regurgitol is a dumb idea, but ask your doctor anyway.
It is that same hostility to the wealthy, the achievers, the employers, that runs through the Democratic Party.
ReplyDeleteThis notion that tax cuts "costs" something reflects their view that the money belongs to the government and that they should decide what should be done with it. It "costs" them if they could have gotten their hands on it and failed. They want to maintain a bloated bureaucracy that pays off a constituency that, in turn, helps elect more big government statists. Mo' government, mo' taxes, mo' spending, mo votes.
They never acknowledge the history that when the taxes are cut (like the capital gain tax) more business is generated because businesses can decide themselves what they can do with the money. That creates more business activity, growth, and jobs and, not incidentally, more tax revenue to the government. Of course they can't control it that way.
They forget that the daily decisons of 10s of millions of Americans about what they should spend on, what they should invest in, what they should do with their hard earned money makes infinitely better decisions than the theorists who never worked in the private sector, who never had to balance an inventory, who never had to meet a payroll, who never had decide on whether to expand or contract a business or a project or anything else. It is a different kind of experience and intelligence they just don't have. The Democrats supporting big government always assume they decide priorities better than the little people (who "cling to their guns and bibles and don't like anyone who arn't like them.").
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I had this one figure out years ago. When George W. Bush came into office, we had a $5 trillion national debt, a budget surplus that allowed us to start paying down that debt for a year or two, and showed promise of allowing us to continue to do the same.
ReplyDeleteGeorge Bush instituted tax cuts to "give the surplus back to the people."
As a result, when he left office, we had been running deficits every year, the debt had doubled to $10 trillion, and we were tipping into a Depression with no maneuvering room to stop it, except adding another $1-2 trillion to the debt.
I didn't need a council of economic advisers to explain this. Whatever this dolt says in her way out doesn't enlighten me any further. The numbers and the measures taken speak for themselves.