Harvard Economics prof Greg Mankiw says President-elect Barack Obama's incoming chief economist assumes in her economics models now that increased government spending has a much larger positive economic impact than tax cuts do. That's interesting, Mankiw points out, because in March 2007 report she did at UC Berkeley, she came to the opposite conclusion:
"That is, Team Obama assumes that tax changes are less than half as potent in influencing the economy as the new CEA Chair estimated them to be in her own research."
Just wait till Team Obama gets together with Team Beshear about saving Kentucky.
2 comments:
Sounds like Harvard Economics prof Greg Mankiw is spinning some more conservative myths about government spending.
For every dollar spent on food stamps, that puts $1.73 into the economy.
Making dividends and capital gains tax cuts permanent only puts $0.37 into the economy.
Making Bush's tax cuts permanent only puts $0.29 into the economy.
Extending unemployment benefits puts $1.64 into the economy.
Infrastructure spending puts $1.59 into the economy.
The problem with tax cuts is that people don’t spend them in ways that get the economy moving. The Wall Street Journal reports that only 10 to 20 percent of the money remanded to taxpayers in the 2008 tax rebate actually got spent. The other 80 to 90 percent ended up in people’s personal savings, were used to pay off creditors, or were simply absorbed by inflation and higher living costs.
You can read more about absurd conservative myths about the economy at: http://www.alternet.org/election08/118405/
Conservative economists seem to have difficulty understanding and accepting American values of our founders. That's because their economic philosophy is based largely on the economic philosophy of feudalism.
Conservative economic philosophy is based upon the "Divine right" of the wealthy to pillage and plunder to less affluent subjects of the kingdom.
In Federalist Paper 30, Alexander Hamilton wrote:
"Money is, with propriety, considered as the vital principle of the body politic; as that which sustains its life and motion, and enables it to perform its most essential functions. A complete power, therefore, to procure a regular and adequate supply of it, as far as the resources of the community will permit, may be regarded as an indispensable ingredient in every constitution. From a deficiency in this particular, one of two evils must ensue; either the people must be subjected to continual plunder, as a substitute for a more eligible mode of supplying the public wants, or the government must sink into a fatal atrophy, and, in a short course of time, perish."
Hamilton understood the economic philosophy of feudalism and its willingness to plunder the subjects. Hamilton also anticipated such conservative nonsensical economic philosophy of the likes of Grover Norquist. Such anti-American economic philosophy is similar expressed by the Cato Institute and Bluegrass Policy Blog.
Okay, Hempy, you don't like conservatives. But that doesn't explain why Obama's economist came to two opposite conclusions in two different venues. What would Alexander Hamilton say about that?
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