Why Aren’t Dems Happy About a Keynesian Stimulus?
If I remember my macroeconomics class correctly, isn’t any tax cut a keynesian stimulus, just as any government spending is a stimulus. According to the theory, in both cases shouldn’t either one have some type of temporary multiplier effect on GDP as whoever gets the tax cuts spend the money on goods which then goes to pay workers which then spend the money, etc.?
It seems to me that dems should be for the tax cuts purely because the deficit spending should boost GDP. Wasn’t Krugman worried that if we don’t spend more that the economy will tank and that we shouldn’t worry about deficits right now? Where is he out there championing all these tax cuts?
And why haven’t I heard anyone in the GOP make these points? Also, why haven’t I heard them talk about how much the ‘rich’ pay in taxes relative to their income? I think the top 5% earn 40% of the income and pay something like 60% of income taxes. That seems to me about 50% more than their fair share.