Skewering of Leftist Economic "Conventional Wisdom"

[whell]

Originally Posted by finnbow

Holtz-Eakin is a dedicated supply-sider and the president of a right-wing think tank, the American Action Network. He's about as credible as your Dear Leader's other Alt-Economist, Stephen Moore. There's not a single, credible non-partisan economist or economic think tank who believes that this tax cut will pay for itself.

If you believe this tax cut will pay for itself, you likely also gullible enough to believe that your Dear Leader isn't a liar and a racist.

I think this is hilarious. First, I need to catch myself before fall into the absurd talk track that a corp tax reduction - or tax reduction of any sort - must "pay for itself". If for no other reason that the totality of our tax code is made up of so many moving parts that a singular event like a relatively modest reduction in corporate income tax - which accounts for only about 10% of total tax revenue - is going to somehow send the US government into fiscal distress.

Second, to "pay for itself", we'd need to sustain on average an increase in economic growth of 1% over the current CBO projection of 1.9% for 10 years. Since economic growth rates over the past 10 - 15 years are at historic lows, and most economics suggest the economy is poised for a period of sustained growth, are we really saying that economic growth of 2.9% per year is an unreasonable estimate? (And I don't necessarily but the idea that since we're nearing "theoretical full employment" the prospects for economic growth are compromised).

Even if its 2.5%, we can certainly take steps to "pay for" the a tax rate reduction in other ways. The federal budget is a cesspool of overspending and opportunities to reduce the scope of "paying for" a tax reduction are everywhere.