A Non-Pragmatic View Of Tax Policy
[W]hen it’s cheaper to pay for things by borrowing money than by taxing productive activity, it’s pretty foolish not to step up your borrowing. The issue we ought to be debating is whether we should increase borrowing by cutting taxes or increase borrowing by hiking spending.
This is obviously true. It would be the right economic policy to both cut taxes and borrow to increase government spending. But that's not going to happen in our political world of "governments are like households." The choice for Democrats is whether we will cut taxes AND reduce spending. That's why I oppose cutting taxes now - because cutting taxes is less effective stimulus than government spending. A pragmatic view of our choices makes this clear. Yglesias asks "With the House controlled by Republicans and the White House controlled by Democrats, we’d end up compromising on a mix of the two. Instead we’re talking deficit reduction. Why?" Because Democrats, led by the President, played into the deficit scare is why. For some reason, people don't like to say that. But that's the main reason.
Speaking for me only
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