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Mitt schools us on the economy


CNN's website published an opinion by Romney which contains most of what you would expect plus a few of these outright "gems":

First, there are two ways you can put money into the economy, by spending more or by taxing less. But if it's stimulus you want, taxing less works best. That's why permanent tax cuts should be the centerpiece of the economic stimulus.

Now, i'm not a big-city economist (or one at all), but i believe the consensus is that you get a larger effect from spending increases vs tax cuts.

(http://econospeak.blogspot.com/2009/01/ricardian-equivalence-does-not-imply.html, http://krugman.blogs.nytimes.com/2009/01/13/bang-for-the-buck-wonkish/) 

He then suggests that spending won't stimulate the economy because the rebate checks didn't increase consumer spending.  Of course, the stimulus bill looks to the government to spend the money rather than relying on consumers to spend the money, (consumers who would be foolish to spend given the economic outlook).                                  
                                                                               
(Consider: http://krugman.blogs.nytimes.com/2009/02/02/i-do-not-think-that-word/ concerning this confusion).                         


Romney again:
As we take out nonessential projects, we should focus on funding the real needs of government that will have immediate impact. And what better place to begin than repairing and replacing military equipment that was damaged or destroyed in Kuwait, Iraq and Afghanistan?

Though i believe non-military spending again gives more bang for the buck.
                                                                          
I'm glad to see Krugman making the rounds and disabusing people of various things.                                                                                        


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Taxes don't take money out of the economy, they allow Government spending of that tax money to participate in the economy where private parties might otherwise have spent. One can argue which kind of spending is "better" on a case by case basis.

Tax cuts replaced by deficit spending adds debt service to the economy and debt to the balance sheet in DC. That's not a good, in my view.

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