Sunday, September 16, 2012

Tax cuts and the economy

I know that evidence hardly has anything at all to do with political persuasion. But I submit nonetheless that this article, called, Do tax cuts lead to economic growth? by David Leonhardt, is an absolutely crucial contribution to our current debate. The article was published in the Sept. 16, 2012 New York Times, The Sunday Review, page 4. Let's start with the graph (and click to expand).

To quote Leonhardt, "Bill Clinton and the elder George Bush both raised taxes in the early 1990s, and conservatives predicted disaster. Instead, the economy boomed, and incomes grew at their fastest pace since the 1960s. Then came the younger Mr. Bush, the tax cuts, the disappointing expansion and the worst downtown since the Depression." Leonhardt calls this "one of the most serious challenges to modern conservativism."

Now Romney is promising -- as the centerpiece of his economic plan, apparently -- more tax cuts, and inevitable economic growth as a consequence. But why?

See "definition of insanity."

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