Too bad

Friday 7 December 2012 - Filed under Uncategorized

Too bad no one in government, nor their lackie media, nor their loyal TEAM players will pay attention.

The deficit debate is often misleading, however, because it tends to ignore a huge difference between the two kinds of deficit reduction. The evidence speaks loud and clear: when governments reduce deficits by raising taxes, they are indeed likely to witness deep, prolonged recessions. But when governments attack deficits by cutting spending, the results are very different.

In 2011, the International Monetary Fund identified episodes from 1980 to 2005 in which 17 developed countries had aggressively reduced deficits. The IMF classified each episode as either “expenditure-based” or “tax-based,” depending on whether the government had mainly cut spending or hiked taxes. When Carlo Favero, Francesco Giavazzi, and I studied the results, it turned out that the two kinds of deficit reduction had starkly different effects: cutting spending resulted in very small, short-lived—if any—recessions, and raising taxes resulted in prolonged recessions.

The only differences between cutting spending and raising taxes the above groups would have you believe are that reducing government spending is inherently racist/sexist/some other-ist, and seeks only to protect the “wealthiest” Americans, while raising taxes is virtuous and “fair.”

The politics of Team BLUE are based solely on envy and the desire to expand government and its influence in every way possible. They want to punish with force. They simply do not care how much damage they cause.

2012-12-07  »  madlibertarianguy