Thursday, January 23, 2003
The Fickle Trickle-I don't have the energy to do a full fisking, but this Krugman piece deserves a partial slap-down
There's been a concerted effort to convince us that we shouldn't - that anyone who even pays attention to who gets what must be motivated by envy. Consider a recent cover of Business Week. Under the headline "Class Warfare," it asked: "Suppose Bush's tax plan works: It raises long-term growth, reduces unemployment, boosts workers' wages, and eventually cuts a rising deficit. ... Now suppose the rich get richer, and income inequality gets worse. Time to vote." As Superman used to say, "What th'?" Does Business Week really think that's the argument - that opponents of the Bush plan agree that it will do great things for the economy, that the increase in inequality it will cause is their only objection? In fact, those who oppose the Bush plan think it will work no better than the 2001 tax cut: that it will do little for growth or employment, and will sharply raise the deficit. (These guys now have a track record, and it's not encouraging. In the year and a half since that tax cut, which was sold as the perfect economic stimulus, the economy has lost 1.4 million jobs.)Well, we had things like 9-11, Enron and the end of the computer/telecom gold rush in the last year and a half as well; does ceterius paribus slip out of your working vocabulary when a Republican administration's in office. No, there are other arguments, like wanting to spend the tax revenue or an ethical obligation to burden the rich more. However, income inequality is a big issue with the left, but the two other arguments are as big. Higher taxes means higher government spending, all else being equal, and the left has a high value on the efficacy of those programs. Cutting taxes will mean that programs won't get funded, worsening the country in the liberal's eye. Also, a desire to spread the burden fairly leads them to want to tax the rich much more than the average worker. However, a lack of knowledge of economics has them forgetting the secondary damage of higher taxes in decrease private sector spending and decreased investment to the economy. The burden of higher taxes on the affluent isn't just inflicted on the affluent. To the liberal, the idea that Business Week would think that a tax cut is good for the little guy is a head-scratcher. No, Dr. Krugman, it's just that they understand economics in a different way than you do.
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