Raising Taxes on the Rich: Not Whether but How - Bruce Bartlett

[Bill USA]

Bruce Bartlett held senior advisory positions in the Reagan and George H.W. Bush administrations.

Bartlett's criticisms of the Corporate Lobbyists partiers are excellent. And coming from a former advisor to two Republican presidents it makes them hard for GOPers to dismiss. Makes for good rebuttals to anti-revenue Conservatives or any GOP suckers.

(all emphases are my own_Bill USA)

http://economix.blogs.nytimes.com/2011/12/06/raising-taxes-on-the-rich-not-whether-but-how/?ref=business
December 6, 2011

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[font size="3"]Republicans like to pretend that cutting spending is economically costless, even stimulative, whereas raising taxes in any way whatsoever is so economically debilitating that it dare not be contemplated. This view is complete nonsense.

Careful studies by the Congressional Budget Office and others show that certain spending programs are highly stimulative, whereas tax cuts provide very little bang for the buck.


Congressional Budget Office

Keep in mind that these results are symmetrical. A policy with a high multiplier, such as government purchases, will reduce the gross domestic product by exactly the same amount if it involves spending cuts. A tax cut with a low multiplier will have an equally small negative economic effect if it is instead done as a tax increase.

This would suggest that one of the worst ways to cut spending, from a macroeconomic point of view, would be to do it the way Republicans proposed last week: by cutting government employment. Judging by the table above, cutting taxes for lower- and middle-income people and paying for it with higher taxes for higher-income people, as Democrats have proposed, is unambiguously stimulative.
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[Recoverin_Republican]

1. recommended.

[FogerRox]

2. As long as we raise taxes and use the revenue for jobs stim thats fine

but raise taxes to pay down the deficit is stupid and leads to contracting the economy. Republicans like to pretend a lot of things, Modis operandi.

kNr.

[Bill USA]

3. if you read the OP you'd see that Bartlett says your (GOP) position is "complete nonsense"

"Republicans like to pretend that cutting spending is economically costless, even stimulative, whereas raising taxes in any way whatsoever is so economically debilitating that it dare not be contemplated. This view is complete nonsense."

[FogerRox]

4. LOL, then just what was it that FDR did?

[Bill USA]

5. he did not raise taxes to stimulate the economy. He stimulated the economy and ran deficits.

If you raise taxes to stimulate the economy and in the process (in raising taxes) you do not run a deficit you are not stimulating the economy. To do that you must put more money into the private sector than you are taking out.

This is why the Republicans, who a few years ago said: "Deficits don't matter." now demand austerity measures. They know if they allow too much stimulus that we would crawl out of this Republican Dystopia quicker. Obviously, they have done a good job at limiting the stimulus and have delayed the slow recovery which now seems to be taking hold, almost two years.

Bruce Bartlett has stated that FDR's mistake was not in running deficits, as Conservative econoComics contend, but that he didn't run BIG ENOUGH deficits.

The Real Lesson of the New Deal: Deficits were too Small not too Large

One reason why Republicans strenuously oppose the Obama administration's fiscal stimulus plan is because it repeats the errors of Franklin D. Roosevelt. To them, the New Deal was mainly about vastly expanding government spending and deficits, which Republicans believe made the Great Depression worse rather than better. Therefore, doing so again in the present downturn will also lead to failure.

The true New Deal legacy, however, is more complicated. Serious mistakes were indeed made. In particular, the National Industrial Recovery Act was fundamentally ill-conceived and retarded economic recovery. But in terms of fiscal policy, Roosevelt's error wasn't that he spent too much, but that he didn't spend nearly enough.
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... Oh, you can stop laughing now.

[FogerRox]

6. It should be clear that FDR didnt spend enough, or long enough

When the CCC and the WPA had funding cut 60% in 1937. 3 yrs was not enough. And yes, many say FDR's deficits could have been larger, there is a certain validity there.

My other point (which might have been taken the wrong way) is about raising taxes to pay the deficit down, that would truly suck. I think Comers has a recent paper on that, its clearly going to contract the economy.