Reply To: Nancy Pelosi is Right – The Deal is No Deal: Make the Tax-Cuts Permanent

Charlie, you’re fielding the important questions and issues again and jumping on some unimportant statements. But, just like I’ve done before (and your issues were cut in half, Laffer Curve etc.) I’ll do so again.

When I say induced growth, it isn’t government jobs (which also had a nice share in this growth – census etc.), I’m talking about the GDP – inflated by government expenditure on transfer payments that gets people to spend and boost the GDP (for me that seems to be indirectly, don’t know how far your blindness has taken you) temporarily (as long as the government is spending and the money is circulating). I want growth that is self induced by consumption and investment – natural growth! That’s what I call an economy! (I know socialists call government expenditure the economy.)

I can’t argue on something that I’ve never read about. I doubt that such a landmark recovery of the US and capitalism would be ignored by history text books. But all I can say is that this talk isn’t just talk of the government defaulting over debt – it’s the collapse of the currency as well (Russia already decided to go for the Chinese currency).

High debt leads to high interest rates. Period. Ask Greece! Read the article I linked to, to get an idea why the interest rates are low – it’s a timebomb waiting to explode.

I’m using factual evidence. The taxes were lowered and after it went into the system affecting the GDP the tax revenue increased above average. Yes, the economy crashed and brought the tax revenue along, that would’ve happened regardless – less tax base = less tax revenue. I just mentioned it so that you shouldn’t begin screaming that it dropped thereafter.

Purchasing goods or services does indeed have a direct effect on the economy. Did they invest in the military, infrastructure etc? That’s called purchasing goods or services. WWII did that – unemployment insurance is spreading the wealth – no direct effect!

I’m blinded by ideology? I don’t favor the (liberal) Keynesian theory as all, I’m a Monetarist. I just proved that even according to Keynes – tax cuts is the way to go. You couldn’t refute that claim. Does tax cuts have the disadvantages (that exist with spending) of crowding out and lags? Do tax cuts have the ramifications (deficit – even if you don’t believe in Laffer’s curve, it still proved to do less damage to the defict than spending – covering at least most {1% less than before} of the tax revenue) spending has? Do tax cuts work demand-side AND supply-side? Will temporary tax cuts really have an effect in companies hiring? How should we get the businesses start spending instead of stashing away cash beacuse of the low interest rates? According to Keynes, spending shouldn’t be transfer payments! Those are just some of the questions and points mentioned above – and it’s all according to Keynes – Obama’s ideology!