🚀 go-pugleaf

In article <Btp1Gw.Lo6@newcastle.ac.uk> Chris.Holt@newcastle.ac.uk (Chris Holt) writes:
>>	Jesusssss Christ.  You post 500 lines explaining that tax cuts generate
>>growth (and more revenues) and someone still comes along trotting out the old
>>"tax cuts equals deficits".
>
>>	SPENDING BEYOND REVENUE INTAKE CREATES DEFICITS.  PERIOD.
>
>Jesus Christ yourself.  Any economic model that resolves into a
>handful of slogans like the above is far too simplistic to be
>useful.  Spending beyond revenue intake can have any of a number
>of effects, depending on the overall state of government finances
>at the time, how much slack there is in the economy, and what
>that spending is used for.

  Sorry Chris, but spending beyond revenue creates a current accounts
  deficit (by definition) and the current accounts deficit is what 
  is being referred to by the "budget deficit".    

  Those other things may be relevant to whether it might be a reasonable
  thing to run a current accounts deficit, or whether you actually go 
  into debt (you can run a deficit without going into debt by spending 
  your reserves, selling assets, etc).  


>>	Hmmm, well.  The evidence points to the legitimate success of
>>supply-side economics.  Growth is spurred by putting more disposable income
>>into the economy.  Production is spurred by providing more investment funds
>>(e.g., don't tax capital gains).
>>	Competition is spurred by keeping government out of the way of
>>business.
>
>More matras, none of which are always true.


   This is the problem on both sides of the issue.  None of the
   traditional "isms" or mantras really provide the thinking person
   with anything to hang his hat on.  There are too many counterexamples
   to both models and everything in between to have any faith in them.
   And "faith" is the key word here: economics is not a sufficiently
   rigorous science to have much useful predictive value, so economic 
   theories are more religion than science.

   And I this is true in another sense:  It is my personal opinion
   that many true believers in this or that social/economic "ism",
   on the left, right, or elsewhere, are motivated by the same thing
   which motivates religious fundamentalists -- needing to find some
   "order", some "explanation", some "rules" in a chaotic universe.  
   


---peter