It's dark, gusty and rainy here at the beach, but I haven't lost my optimism. I'd recommend reading Jonah Goldberg's recent column about how
Obama's overreach has been a fortunate mistake for those of us who believe in free markets and limited government. Some excerpts (and note the weather analogy at the end):
The stimulus bill was a bridge too far, an overplayed hand, ten pounds of manure in a five-pound bag. The legislation’s primary duty was never to stimulate the economy, but to stimulate the growth of government, the scope of the state.
By spending hundreds of billions on things that have absolutely nothing to do with providing an immediate stimulus for the economy, Democrats hoped to make a down payment on their dream government. The billions for student aid, expanded welfare and health-care benefits, and bailouts for profligate state governments; the hundreds of millions for better museums and prettier government buildings; and the millions for smoking-cessation programs and bee insurance aren’t just items on crapulent Democrats’ wish list. The budget bloating was deliberate.
The economic crisis was almost too good to be true. Like FDR and Lyndon Johnson, Obama was poised to act on Rahm’s Rule of Crisis Exploitation in a way that would not only guarantee a newer New Deal and an even greater Great Society, but would also receive bipartisan approval. That’s why Obama wanted so much GOP support—so as to ratify the left turn to European-style social democracy, particularly when voters cottoned on to the con.
Obama and his party were undone by their hubris. There was just too much muchness in the bill.
There is still probably bipartisan support for a stimulus bill, but only for a measure intended to stimulate our market-based economy rather than one that hastens its Swedenization.
Obama’s presidency has many victories ahead of it, and Democrats still run the show. But the perfect storm of liberalism has dissipated to mere scattered showers.
It's dark, gusty and rainy here at the beach, but I haven't lost my optimism. I'd recommend reading Jonah Goldberg's recent column about how Obama's overreach has been a fortunate mistake for those of us who believe in free markets and limited government. Some excerpts (and note the weather analogy at the end):
I recently listed all that I owed to progressive legislation passed during the last two times the Democratic party had strong majorities in Congress and held the White House as well. Let me share my list here:
ReplyDeleteMy debt to the New Deal:
My parents were able to live securely in retirement (SS)
I was able to get by while looking for another job (Unemployment Benefits)
I was able to work in a unionized workplace (NIRA and NLRA)
My bank account is secure (FDIC)
My limited retirement savings are relatively safe (SEC)
I have a roof over my head (FHA)
My debt to the Great Society:
My clothing as a child was safe (Flammable Fabrics Act)
I was able to feed myself when I could not afford to (Food Stamps)
My car has seat belts (Motor Vehicle Safety Act)
I'm confident my food is healthy (Wholesome Meat and Poultry Acts and Fair Packaging Labeling Act)
My air is fit to breath, water fit to drink (Clear Air, Water Quality and Clean Water Restoration Acts and Motor Vehicle Air Pollution Act)
I can hear the sounds of nature in my backyard (Aircraft Noise Abatement Act)
I can still find places unspoiled by man (Wilderness Act)
I can go hiking on the Appalachian Trail (National Trails System Act)
My hometown still has evidence of its past (National Historic Preservation Act)
I can make informed choices when borrowing money (Truth in Lending Act)
My school district was able to afford to employ me (Elementary and Secondary Education Act)
My mother was able to die with dignity in a nursing home (Medicare)
I will soon earn a PhD in Economics (Higher Education Act - Pell Grants and GSLs)
My debt to the Republican Party:
(crickets chirping)
Thank You Democratic Party for all you have done for me, my family and others. Thanks to you I will be able to afford to pay the taxes that will enable the next generation of Americans to have the same opportunities and quality of life that I enjoyed.
Scott,
ReplyDeleteGlad you are still optimistic on the beach! When we lived in California I hated winter rain too...
Some thoughts on the Obama marketing strategy to get this bill passed. (Coming from a guy who does marketing by day ;-)
...As marketing goes, many times the most nauseating campaigns are the ones that win. Why? Because they create just the type of emotional response that you have expressed here... and the Republican law makers inside the beltway...
The goal in this type of strategy is all about creating results and actions based on emotion. In fact the most successful marketing tactics create swift action based on negative emotion.
This stimulus package campaign has indeed created a swift emotional response -- every marketeer's dream. What you've seen in the past several days are Republican Senators moved to tears and a compromise bill emerging extremely quickly. I would speculate that this is precisely what the administration was hoping would happen...
Given this swift emotional move to action, the bill will likely have significant bi-partisan support in the Senate... and I'd guess the re-written compromise bill in the House will also have significant support. And no doubt Obama will sign it.
The Obama marketing machine is like none I've ever seen in politics or business. (The fact their first proposal created your "powerful argument against it" I suspect was an extreme compliment to their strategic efforts)
What the citizens want are results, not gridlock.
And when the results happen, the honeymoon will continue. If results don't occur then the agape will abate.
But my guess is that this thing will pass now with massive support on both sides. A pretty amazing feat in DC no matter what side of the aisle you find yourself on...
Wishing you sunshine soon!
Eldon
PS. 300+ days of sunshine a year over here... ;-)
http://www.metrodenver.org/living-here/climate
Mark A. Sadowski,
ReplyDeleteI certainly agree that those who support a larger role for the federal government should thank the Democrat party more than the Republican party.
But if one looks at things from an international perspective, it's far from clear that increaing the role of government in the economy generates increased happiness or increased economic prosperity.
For example, look at the economy of France over the past 20 years. Then look at the the economy of Ireland over the past 20 years.
Ireland's economy was among the fastest growing economies of Europe while France's economy was among the slowest during that period. Ireland followed a course similar to Reagan-omics while France followed a course of "progressivism."
Consider also during the last French presidential election how Sarkozy campaigned briefly in Great Britain because so many skilled Frenchmen has decided to leave France due to its economic policies. In other words, people have voted with their feet against the progressive policies of France.
Isn't that the way it always works?
When Germany was divided East from West and the East was communist while the West had a mixed economy, people wanted to leave East Germany for West Germany.
North Korea has suffered famine in the last 15 years while South Korea has become one of the largest economies on the planet.
The Republican party does not always resist "progressism." Examples are Nixon's wage and prices controls, George H W Bush's tax increases, George W Bush's "No Child Left Behind" increases in education spending.
Still, the track record of progressivism doesn't look very good to the track record of capitalism in terms of providing large numbers of people happiness and wealth.
Mark -- I'll give you the New Deal was passed over the objections of most Republicans, but more on that below; as for the rest of your list, much of the remainder is the result of strong bipartisan support, without which a number of these initiatives would not have become law. And some of these laws are just plain overreach and unnecessarily burdensome, but I won't debate that here.
ReplyDeleteIt was the Eisenhower administration and a Republican Senator from Indiana, for example, that gave us the first federal air control pollution bill in 1955. It was the Nixon administration that dramatically changed the Clean Air Act in 1970, and it was Nixon again who gave us the Clean Water Act in 1972. And of course it was a Republican president and Congress in 1872 who gave us the first national parks, and Republicans -- especially Theodore Roosevelt -- who expanded the system we know today in the years that followed. The Antiquities Act of 1906 set the stage for every piece of historic preservation that followed.
So don't forget to thank Tricky Dick and TR the Big Game Hunter in your prayers tonight.
But my main complaint is not your selective history lesson. It relates to your debt to the New Deal, which is only half the issue, I should think, and not terribly relevant to today's debate: no one is proposing abolishing these institutions, so you've set up a phony bogeyman of an issue. The real issue today is what your precious Democatic majorities have done both to these institutions and to the unstoppable growth in government spending, wherein lies the seeds of their destruction. Through the CRA (Carter and then Clinton) the Dems handed us the current crisis and in the process killed Fannie and Freddie. And without entitlement reform, which Democrats have blocked at every stage, Social Security, Medicare and Medicaid will not survive. This is beyond indisputable.
So don't forget to also thank the last generation of Democrats in power for the coming entitlement disaster too. You owe them a debt of gratitude for this too.
Jon S.,
ReplyDeleteIt's true that most of the New Deal was passed over the objections of the GOP.
However, it's worth revisiting the New Deal and determining how much of it has improved our society and how much of it hurt it.
The existance of the FDIC means that I can deposit my money at a bank that is making reckless loans and if that bank fails, the FDIC (or the taxpayer if the FDIC runs out of money) has to pick up the tab.
The existance of Social Security means that if I die before I turn 65 years old, the government has basically picked my pocket during my entire working lifetime.
The existance of farm subsidies (another result of the New Deal) is that millions of taxpayer dollars are paid to wealthy farmers and corporations like ADM.
The existance of unions means that auto-makers like GM lose billions of dollars even when they sell a record number of automobiles as they did in 2007 while Toyota makes a profit. Eventually GM asks the taxpayer for a welfare check too.
The ideology behind most of the Democrat party and a significant portion of the Republican party is to put more and more people on welfare.
If someone has the ability to make money, this ideology requires that this person be labeled as "greedy" and "rich" and that he or she be taxed at a higher rate. If a corporation is making a profit, this ideology requires that the government impose more regulations and higher taxes on it in addition to requiring it to purchase all of its labor from a monopolistic union organization.
But when a corporation or person is unable to pay its bills, this ideology requires that the government shovel money in their direction. The result is that the government ends up punishing work and investment while rewarding bad decision making.
Fortunately, this ideology hasn't taken hold as much in the United States as it has in much of Europe....... yet.
Spiral: all good points, and ones I chose not to get into since I felt the better discussion was correcting the erroneous impression Mark left about the history of these programs, as well as the problems failure to reform all these New Deal-era or -inspired programs will bring on us all.
ReplyDeleteI also think, as I mentioned, that much as we might like to end some of these programs, it's just not going to happen. Our best bet is to mitigate the worst aspects of them going forward, b/c I do not believe there is an ounce of political will now and in the foreseeable future to do away with these sacred cow/behemoths.
Let me just add some thoughts on social security here. It is nothing more than a tax masquerading as an annuity program. It is an annuity administered by politicians instead of by actuaries. It is an investment will give its investors the worst rate of return imaginable. It is ultimately a Ponzi scheme, much like a lot of the liberal programs. Once we run out of population growth, which is driven by immigrants, the systems will collapse.
ReplyDeleteJon S.,
ReplyDeleteI guess I let my partisanship show (not like it was difficult to guess before). You're right that the Republican Party has had its own history of progressive legislation of course. In fact what is striking historically is how in many ways the Democratic and Republican parties have switched places both regionally and politically since the 19th century. In your list of Eisenhower's contributions you forgot to mention the Interstate Highway Act, which I would argue based on the CBO's recent macroeconomic projections probably increased long term GDP growth in the last half of the 20th century.
Recently I wrote the following to describe how much the Republican Party has changed. Keep in mind I don't endorse everything Lincoln did (such as increasing tariffs) and with the possible of the income tax and intervention in the cotton industry, none of what I mentioned was war related:
"What was Lincoln's ideology? It's important to remember that before Lincoln was a Republican, he was a Whig, and Whig economic policy strongly influenced the early Republicans.
In terms of economic policy, the Whigs followed Henry Clay's vision of the "American System." As a philosophy, the American System favored government support for a modern industrial economy in which education and business would come to equal physical labor and land ownership as a means of income. As a result the Whigs sought to promote domestic manufacturing through protective tariffs. They also favored a growth-oriented monetary policy with a new Bank of the United States. And they supported a program of infrastructure improvements, such as roads, canals, and railroads, subsidized by the government. And finally, the Whigs favored federal government support of public schools, private colleges, charities, and cultural institutions.
Lincoln remained true to his Whig roots.
In 1862 he signed the following acts:
•The Homestead Act, which made millions of acres of government-held land in the West available for purchase at below market cost.
•The Morrill Land-Grant Colleges Act, which provided government land grants for agricultural universities in every state.
•The Legal Tender Act of 1862 which established the United States Note, the first paper currency in United States history.
•And also in 1862, Lincoln approved the creation of the Department of Agriculture.
Subsequent acts included the following:
•In 1862 and 1864 he signed the Pacific Railway Acts which provided government subsidies for the construction of the United States' first transcontinental railroad.
•Through the National Banking Acts of 1863, 1864, and 1865 he created a system of national banks which allowed the creation of a strong national financial system.
And through the Treasury Department, Lincoln effectively controlled all cotton trade in the occupied South during the Civil War, which perhaps was the most dramatic incursion of federal controls on the economy until that time. He also imposed the first income tax in our nation's history, and increased our nation's tariffs.
In short, I find it deliciously ironic that anyone would think Lincoln was a proponent of Laissez Faire." (Time out. I admit that was a little too sarcastic.) "On the contrary he followed a policy of vigorous plan of government intervention in the economy, and perhaps because of his policies, our nation made tremendous strides forward."
Spiral,
ReplyDeleteI don't find your argument about "voting with their feet" to be very persuasive. The U.K. isn't that much different from France in terms of the size of government or the progressiveness of their taxation. Also, there are a lot of American expatriates who live in Western Europe and are quite happy there.
As for the case of Ireland, by odd coincidence the subject of factors affecting GDP per capita growth in Europe is my dissertation topic. What you say about Ireland is true, and I would also throw in the examples of Estonia, Latvia and Lithuania. However, what worked for those countries is unlikely to work for more developed countries for the following reason.
First, my own research indicates that the primary factor affecting GDP per capita growth differences within the EU is corporate tax rates. The low corporate tax rates in those countries served as an incentive for corporations in highly advanced countries to invest there. The investments brought cutting edge technology that led to a rapid growth in productivity. It is an excellent strategy for developing countries with highly educated workforces and decent infrastructure. However, once those countries close the productivity gap it loses its effectiveness. Ireland has caught up with Western Europe and the United States in productivity and its long term growth rate has slowed down, so unless it can get foreign direct investment from aliens in outer space (flying saucer factories perhaps?) it is unlikely to grow as rapidly in the future.
I think there is an optimum size of government expenditures (as well as other forms of involvement in the economy). Sure, you have extremes like East Germany and North Korea but you also have the opposite extremes in parts of the developing world where government involvment is weak an inconsistent. Anarchy is no better than totalitarianism. The answer lies somewhere in the middle (and surely you would admit that West Germany and South Korea
were closer to that middle).
Government spending requires taxation which causes deadweight losses and so has negative effects on output and growth. On the other hand there are many examples of markets where positive externalities lead to less than optimum equilibriums unless government steps in and provides the funding. Without that funding the output level and long term growth is stunted. Theoretically the ideal size of government is where deadweight losses from taxation are equal to the social benefit or (deadweight "gains") accrued from government expenditures.
There is no empirical consensus on what size of government is optimal. It is probably country specific and dependent on how optimal the public policies a country is pursuing are. France, Netherlands, Belgium and Luxembourg for example all have government expenditures of about half of GDP and persist in having higher GDP per hour worked (productivity) than in the U.S. or Canada where government is much "slimmer." Similarly, the U.K., Sweden, Finland and Luxembourg all had higher rates of productivity growth than the U.S. or Canada from 1995 through 2004 despite having government expenditures of the same proportion. And Ireland may be following a tax policy more supply side in orientation than the rest of Western Europe (or than us for that matter) but they still have national health care, free education (at all levels including post graduate) and a much hugher level of public investment in infrastructure than in the United States. (They also have a higher productivity level as well.)
In our own case, I think the optimal size of government is somewhat larger than it is now. Even a small increase in government expenditures and regulation could yield large returns by grabbing the lowest lying fruit (so to speak) if it is done with careful attention to policies that create the most efficient outcomes.
Scott,
ReplyDeleteI just want to throw in one more comment. (I honestly never expected my initial comment to draw this much attention.) Social Security is solvent at least through 2049. A small increase in the payroll tax will probably see it into perpetuity. Furthermore any possibility of it being
"reformed" (privitized?) as you put it, is probably gone now that the S&P 500 just turned in its worst 10 year performance, adjusted for inflation, in its entire history. I have yet to see any reform proposals that would be better than what we already have (the emphasis should be on "security").
As Jon S. said earlier, the best thing is to "try and mitigate the
worst aspects" of social welfare programs. They are not going to go away any time soon and in all likelihood we are going to see an increase in them in the future. My favorite Republican economist/columnist, Bruce Bartlett, wrote about this lately. Although he used to be a rabid supply sider when he was with the Reagan administration, he now strikes me as a good old fashioned conservative in the mode of Edmund Burke or Benjamin Disraeli (unfortunately, a dying breed). Here is the link to the column:
http://www.politico.com/news/stories/0109/17936.html
P.S. I think the original point of this post was the weather. Great Scott, the weather here (Delaware) just turned warm! It's 53 degrees outside and rather than enjoy it I'm inside the house blathering about economic issues!
Mark -- nice try. Does changing the subject usually work for you with your PhD advisors? Filibustering about Lincoln's extension of the federal mandate is irrelevant to your initial post or to any of the responses here to that post. You talked about the legacy of various New Deal programs, and we responded with how broken these programs are today, how much worse it's about to get, and how the party you pay homage to has made things so much worse.
ReplyDeleteFull disclosure here: I was a lifelong Democrat and worked for Democrats for ten years in the US Senate. So I write these things more with regret than any partisan rancor. Republicans on the Hill have plenty to answer for too, but it's mostly failure to stop runaway nanny statism.
Mark -- just saw your last comment. As an economist in training, I suggest you choose your words with more care. Social Security is not in any sense of the word fully "solvent" through 2049, unless you've merely cut and pasted the AARP talking points without any analysis.
ReplyDeleteAccording to CBO, Social Security will begin running deficits in 2019; the SS Trust Fund trustees put it at 2017. Tell me again how it is that the program is "fully solvent?" Not exhausting the proceeds of the Trust Fund is a far cry from being solvent.
As bad as Social Security is, it doesn't end there; Medicare is in much worse shape. Entitlement spending will clearly wreck the economy if left unchecked and unreformed.
Taxes will have to be raised or benefits cut; tax rates would need to double to keep entitlements flowing in the coming decades. In fact, entitlement growth would take federal spending from 18 percent of GDP today to 28 percent in 2050. This does not include interest payments, which keep rising as well.
CBO again estimates that corporate and personal income tax rates would have to jump from 35% to 66%. That is insane. The economy will be crushed under the weight of such taxation and ruinous spending.
Jon S.,
ReplyDeleteIt would be insane, if it were true. Here is the CBO study that those claims are based on:
http://www.cbo.gov/ftpdocs/69xx/doc6982/12-15-LongTermOutlook.pdf
And here is the CBO revenue analysis that was requested by Senator Gregg that you are refering to:
http://www.cbo.gov/ftpdocs/82xx/doc8295/07-09-Financing_Spending.pdf
In 2005 the CBO released long term projections of federal spending and revenues. As usual they had three projections of spending : low, middle and high. The middle level projection represents what they consider to be the most likely scenario.
In 2007 Senator Gregg requested a revenue analysis in response to the CBO study. Not having a copy of his original letter, nevertheless it is clear from the analysis he was interested in creating some analysis that would support some rather extreme claims. The analysis looked at four scenarios. It considered two spending scenarios, high (34% of GDP in 2050 excluding interest),
and middle (25% of GDP in 2050 excluding interest), and matched it with two revenue scenarios. The first revenue scenario assumed that the current tax law is indexed for inflation only. In such a scenario revenue as a percent of GDP increases as incomes increase. The second revenue scenario assumes that not only is the current tax law indexed for inflation, but that it is indexed for income growth as well. In addition it assumes that increases in spending are financed by accross the board increases in marginal tax rates.
The scenario you are of course referring to is the most extreme one, the one where spending grows at the high rate and revenue is increased purely through marginal tax rate increases. Under the most realistic spending scenario, the CBO concluded that the revenue scenario in which we index the current tax law to inflation would provide sufficient revenue due to income growth. In short the most likely scenario means no increases in marginal tax rates will be necessary at all.
The Medicare trust fund will run out of money in 2019 unless something is done however. But the situation is not at all as dire as you suggest. It merely requires that we increase Medicare taxes. Based on the CBO report however, such an increase could be accompanied by a reduction in personal income tax rates without any change in the projected budget balance thanks to growth in income.
So to say that entitlement growth will somehow wreck the economy is, quite frankly, total nonsense.
Well, this debate can go on and on; I can cite many other studies that show a far worse situation than CBO's best analysis -- but it comes down to your rosy scenario vs my pessimistic scenario. The simple fact is that there are now too few people paying into expaning entitlements. You can't wish that away. And if you think that federal spending at 25% or more of the economy is just peachy, with all the distortions and inefficiences and wealth destruction inherent in ever-larger governemtn spending, then there's no hope for you.
ReplyDeleteYou're happy with ever-growing federal spending requiring more and more taxation, giving us less and less bang for the buck. Easy to say from your academic perch, paid for by me and lots of other unentitled Americans against our will. No doubt with good lobbyists you and your pals will continue to get a growing share of taxpayer largesse, as is increasingly the case with our bloated entitlement society. But ultimately the nanny-welfare state destroys weath and freedom. You seem to welcome that, and that's your right, but it's the path of ruin in my view.
Those of us who despair of such nonsense are not greedy, but rather protective of the liberties granted by free-market capitalism.
Jon S.,
ReplyDeleteYou beat me to it.
The progressive argument seems to be that since we don't know the precise optimum amount of government intervention in society, we should celebrate every new government regulation and every new government spending program as "progress."
I think one can only participate in such celebrations if one is either unconcerned or unaware of the negative economic impact of such government interventions.
Mark: As regards the CBO, you should know that their predictions about the impact of policy changes on the economy have been notoriously and egregiously wrong. Their predictions tend to support the prevailing orthodoxy; in that light, when they predict little or no stimulus from the proposed bill one should take that to mean it will almost certainly NOT stimulate.
ReplyDeleteJon S.
ReplyDeleteI never mentioned the CBO's best case scenario. According to the low spending scenario federal spending will be about 21% of GDP in 2050 excluding interest. Neither the low spending nor the high spending scenario is very realistic however. Both make extreme assumptions about the cost of health care. In the pessimistic scenario the cost of health care per recipient increases by 2.5% faster than GDP per capita. To my knowledge, the CBO only makes a single series of projections on the total cost of health care in the United States. According to that projection the total cost of health care will increase from 16% of GDP in 2007 to 37% of GDP in 2050. If one applies the worst case scenario assumption to overall health care, then the pessimistic scenario would imply that health care will be 70% of GDP in 2050. Even if one assumes that the worst case scenario only applies to public health care (not very likely based on historical data) the total cost of health care would rise to 48% of GDP by 2050. The middle scenario seems bad but possible. The worst case scenario sounds like some kind of science fiction novel, where the whole economy revolves around health care.
The elephant in the room, is of course, health care. One has to question a health care system that costs twice as much as in the EU-15in purchasing parity terms, is growing much faster than the EU-15 relative to GDP per capita, and yet delivers a higher infant mortality rate and a shorter life expectancy. The system we have right now is terribly inefficient and is endangering our economic future.
In any case, I guess I'm just incorrigable, because I don't find federal spending at 25% of GDP to be at all alarming. In fact I think it probably should go higher. Provided we broaden the tax base and hold marginal rates down, it would improve our long term growth outlook.
Mark: You can force government spending up to 25% of GDP, but I predict it won't stay there for long. The most tax the federal government has ever collected is about 20.5% of GDP. The average of the past 40 years is about 18% of GDP, about where it is right now. This economy has a fierce resistance to heavy tax burdens.
ReplyDeleteScott,
ReplyDeleteActually, the CBO's outlooks for the near term (1-3 years) have been better than most. Some of most outrageous analyses they have produced were in response to politically motivated requests by congressman (Senator Gregg's request mentioned previously for example). That's why I suggest people look at their general outlooks when interpreting their analyses. On the other hand their long term forecasts are bound to be vague and inaccurate. Nobody can claim to precisely predict what is going to happen 40 or 75 years in the future, so predictions of a federal budget apocalypse based on the CBO's most extreme scenarios are absurd.
I guess I'm part of that heterodoxy because I believe their short term outlooks. I don't just look at theirs, I've also been paying attention to Christina Romer and Jared Bernstein's (admittedly partisan although Romer in particular is a respected macroeconomist who is not going to tarnish her image by forming a biased analysis) and the Levy Economics Institute of Bard College. They are all in the same ballpark with respect to the effects of a fiscal stimulus. I also form my own outlooks (what budding applied macroeconomist wouldn't be attempting that right now).
Your claim that the CBO is forecasting little or no effect from the stimulus is false, as anyone who has read their macroeconomic analysis can attest. Using the middle of the range of their point estimates of the effects on employment and GDP (the middle is much more likely than the extremes, as I've already noted in a previous comment), and their most recent ten year budget outlook, my own simulations show that they are estimating that the House stimulus bill will increase employment by about 4.6 million job-years above baseline employment and increase total real GDP (not annual) by about $890 billion from the second quarter of this year through the first quarter of 2013 above baseline real GDP in 2008 dollars. This does not sound like they are claiming little or no effect to me.
And there is little empirical evidence to support your last statement. Our revenues are only so low because the federal government set them that low. There is no economic law that says they cannot be higher, and it is entirely possible to design a tax system that raises more revenue with less deadweight loss than the tax law we have currently.
Eldon: I think your point about how Obama's marketing machine is firing on all cylinders is a good one. But I don't think he is on track to win massive bipartisan support for the stimulus. I see support declining by the day.
ReplyDeleteScott,
ReplyDeleteI think you're right that the bipartisanship is overstated. Looks like the strategy now is pressuring those congresspersons to vote with the bill if their state (senate) or district (house) voted for Obama in the election.
The "results" mentality is still in play.
(Thanks for the link to the WSJ today... well reasoned writing to oppose this "great experiment")
Hope the sun is back for you.
Today we had lots of wind and rain. The sun only poked through the clouds a few times. But it looks like tomorrow could be a glorious day.
ReplyDelete