Surprise. Paul Ryan was for it (when the GOP was in power) before he was against it (when Democrats are in power). Partisan politics making policy?
Grasping Reality with Both Invisible Hands
When Conservative Republicans Loved Keynes And Expansionary Fiscal Policy
J. Bradford DeLong | Professor of Economics, UCAL Berkeley
3 comments:
Let's hold our horses here Tom, here is the transcript from Ryan:
"Mr. RYAN. That is precisely my point. That is why I like my porridge hot. I think we ought to have this income tax cut fast, deeper, retroactive to January 1st, to make sure we get a good punch into the economy, juice the economy to make sure that we can avoid a hard landing."
OK, up to this point it SEEMS Ryan is on board with counter cyclical fiscal via a tax cut to help employment and output (btw which he does not mention)... but now it takes a strange turn and he brings up the surplus, Ryan continues:
"The concern I have around here is that everybody is talking about let's wait and see, let's see if they materialize."
What is "they"??? "they materialize"? "they" is TAX REVENUES... he continues by pointing out how big the SURPLUS has gotten:
"Well, $1.5 trillion have already materialized in the surplus since then-Governor Bush proposed this tax cut in the first place. The economy has soured. The growth of the projections of the surpluses are higher."
Cue Alexander Hamilton: "Ohhh my the invigorating copious flows!!"
He is NOT making the point that the surplus has gotten too high, he now continues to making the point that the surplus is at risk of falling if we dont do the tax cuts...
"So we have waited and we do see, and it is my concern that if we keep waiting and seeing we won't give the economy the boost it needs right now."
He is saying that the "boost" to the economy is for the purpose of increasing/supporting the surplus.
Nowhere here is he mentioning jobs or output...
On the right, there is a strong belief (probably thru the Laffer stuff) that "tax cuts increase tax revenues" and all Ryan is doing here is parroting this in his zealousness for debt reduction thru surpluses...
He is stupid.
rsp,
Yes, its's straight up Art Laffer supply side. Under all circumstances, tax cuts pay for themselves by generating more revenue — which has been debunked. So cut taxes and reduce "waste" (read non-military govt spending) as a general principle of economic policy.
Brad DeLong didn’t mention an important principle that underlies right wing economics: Keynsian spending works when the money goes to the military, but not if it goes on anything else. See:
http://krugman.blogs.nytimes.com/2011/10/28/coalmines-and-military-keynesians/
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