all of the right have staked their claim to lower taxes. Variously, it's for small government, for promotion of investment, but mostly, it's because people like it.
They've mostly decoupled the discussion of taxes from the discussion of spending.
However, the small government-ers are despairing that the Democrats of course continue to spend, but so do the Republicans. So they hope to starve the beast by going all in on lowering taxes.
The whole "austerity will fix the economy" - I don't know where it comes from other than political themes:
1 Keynesianism has been debunked
2 reducing taxes and spending are good for the economy in the long run so therefore it must also be good in the short run
3 Obama has not been able to fix the economy, so it must be true that stimulus and deficits don't work, thereby confirming #1
But there are even BIGGER things at work:
Why can't Europe do more stimulus? Remember, just how bad this worldwide downturn was. If you think the US is in bad shape, Europe is even worse - they have high interest rates for many of their countries and other problems.
The ONLY reason the US can still do stimulus is that they view the US, relatively speaking, as the safest place in the world for their money. So us running a deficit or having the fed flood the markets with cheap dollars or otherwise "printing money" has not resulted in a spike in interest rates, inflation or a drop in the value of our dollar. SO FAR.
The second the world economy stops sucking, the stimulus steps we have will start to pinch and we will need to get austere ourselves.
- DC Warrior 2012-08-01 06:29:47 (59 views)
- gsw_hoops 2012-08-01 08:50:07 (37 views)
