Greg Mankiw of Team Republican tries to counter an attack from Paul Krugman on Rubio’s tax cut for the rich, which may come as breathing spell from the flap over that “analysis” by Gerald Friedman (my two cents on that flap in a bit).…Econospeak
Krugman v. Mankiw on Rubio’s Tax Cut – Show Me the Model
ProGrowthLiberal
3 comments:
Well dont look for any help from MMT as the tax cuts will make the deficit larger....
LOL Matt, not sure if you are being ironic or not there...
Seriously though, maybe we should stop worrying ourselves with aggregate numbers (deficit, GDP, etc) and start looking at the quality of the disaggregation?
Is pretty dumb to say tax cuts are good because they make the deficit larger (MMT position or not) if all those benefit someone whose propensity to spend that money on something that will affect the 99% of the population is zero. I guess yacht builders would be pretty happy though.
Its just a simple fact that all tax cuts have a positive multiplier. Technically, it doesnt matter if its .1 or 1.5, for every dollar tax cut, you get some positive GDP response. The question is one of A) values and B) efficiency.
A) its immoral to make worse the already destructive levels of income and wealth inequality
B) if you were targeting a 1% increase in GDP ($150 billion GDP increase) due to tax cut fiscal policy and the relevant multipliers are .5 for tax cuts on the 1% and 1.5 for FICA tax cuts then to reach $150 Billion you would need:
A $300 billion tax cut for the 1%
or
A $100 billion FICA tax cut.
This shit is not rocket science.
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