By Paul Krugman
Wielding his widely known powers of rationalization, Paul Krugman lays naked the hidden proof in the back of the $2 trillion tax reduce. With large funds surpluses simply forward, the query of no matter if to chop taxes has shifted to whilst? and through how a lot? With Fuzzy Math, Paul Krugman dissects the Bush tax inspiration and indicates us who wins, who loses, and the way speedy the tax cuts will eat the excess. continually the equal-opportunity critic in terms of defective economics, Krugman additionally tucks into the Democratic choices to the Bush plan. This little publication packs a massive wallop. including significant media appearances, it places Krugman's knowledge and steely-eyed research firmly on the middle of the controversy approximately the best way to spend upwards of $2 trillion. it might probably rather well swap the process historical past.
Read Online or Download Fuzzy Math: The Essential Guide to the Bush Tax Plan PDF
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Extra info for Fuzzy Math: The Essential Guide to the Bush Tax Plan
And few economists would disagree with the broader statement that taxes deter economic activity, because they reduce the incentives to work hard, invest, and take risks. If we could figure out a way to pay for the government services we want without taxing ourselves, our GDP would be larger. And to the extent that we can find a way to reduce taxes without compromising other goals, we can also help the economy grow. Notice that this case for tax cuts is not the same as the “demand-side” argument for tax cuts I described in the first part of this chapter.
The dream of rolling back the welfare state was in danger of perishing. The goal, then, is to put the United States firmly back on the right side of the tipping point. If you think about the conservative agenda this way, you can see immediately that it must go beyond tax cuts; ultimately it must go after our two big middle-class social programs, Social Security and Medicare, and either eliminate them or transform them into essentially private systems. Proposals to partially privatize Social Security are therefore an integral part of the larger vision, and a step on the road to bigger things.
And his monetarist doctrine was as much about his conservative politics as it was about economic analysis. Friedman and his followers emphasized the primacy of monetary over fiscal policy partly because they wanted to undermine the argument that government spending is good because it creates jobs. ) And this was, as I said, an argument that Friedman and his followers more or less won; as we’ll see in a minute, there is a very good case for assigning the job of fighting recessions mainly to the Fed.