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History shows "Balance" of tax increases & spending cuts does NOT work!

Melensdad

Jerk in a Hawaiian Shirt & SNOWCAT Moderator
Staff member
Those who fail to learn from history are doomed to repeat it. :hammer:

Take a look at this video from REASON: http://www.youtube.com/watch?feature=player_embedded&v=vQu7V9pMK48

http://www.breitbart.com/Big-Govern...approach-deficit-reduction-historically-fails
From Nobel laureate Paul Krugman to the free-market-friendly Economist magazine to former Treasury Secretary Lawrence Summers, all sorts of experts are charging that financial austerity measures are killing the great economies of Europe.

"Austerity Is So Wrong!" reads the headline of a Krugman piece at The Daily Beast that argues against cutting government spending during weak economic times. But the critics of austerity have got it all wrong, says Mercatus Center economist and Reason columnist Veronique de Rugy.
Reason's Nick Gillespie talks Europe and austerity, which can offer valuable lessons for Americans as we engage in the economic debate sure to be had as part of the 2012 election. Significant research demonstrates that so-called austerity measures that worked through the years are ones that focused on government spending cuts, without leaning on tax increases to make up the balance between that and GDP.

Packages of spending cuts often lead to economic growth, whereas those including significant tax increases do not, which parts of Europe are learning the hard way today. Government spending is also one of the elements that proves less likely to create economic expansion.

Is Germany doing better than America? It's hard to argue with a 6.2% unemployment rate brought about through serious structural reform, including labor markets. Also, by reducing incentives to stay unemployed and reducing the size of, and compensation for, the government workforce, Germany seems to be faring far better than much of Europe--which responded to economic downturns with higher taxes.

America is headed for economic calamity if we don't embrace serious reform and start putting things right. With their respective core constituencies and politics, are Democrats or Republicans, if pressured by an empowered base, in a better position to deliver the long-term changes most on the right believe we need? It's not a trick question. Watch the short video to see for yourself and learn more.
 
Re: History shows "Balance" of tax increases & spending cuts does NOT work!

Bull crap.

As Puerto Rico has proven during the last three years, Spending cuts and tax cuts do work.

However during the same three years, where in all we got here in the USA was blame and derisive rhetoric, our current government in Washington DC has proven that without cutting taxes,and without cutting spending,the economy will simply just stagnate. And Americans will hopelessly wring their hands as politicians scream bloody foul.
Consider the two nations facing the exact same crisis, and the exact same conditions, in the exact same time frame.The two nations had opposite approaches all under the same world economy conditions.
Both countries were in economic freefall with negative growth and an inability to pay their bills without borrowing $billions.

Puerto Rico cut government jobs,spending and borrowing. they cut taxes, simplified red tape and made it easier for individuals to start new businesses. They stabilized their tax codes and allowed businesses to plan their fututre operating budgets.

As a result, Puerto Rico has cut it's deficit to almost nothing and will likely have a balanced budget next year.

The US doesn't even have a budget, but has managed next to zero GDP growth and added $5.2 trillion to it's deficit. All in the same time period.

The difference is in leadership yes but the proof is in the formula of cutting taxes, cutting government, privatizing what government does not do well, and cutting government spending.

We are currently repeating Jimmy Carter's approach to virtualy the same problem. And we are gettiing the exact same results. When do we ever learn this lesson?

We will need to duplicate Ronnie Reagan's solutions to get out of the hole.
 
Re: History shows "Balance" of tax increases & spending cuts does NOT work!

Franc, the article was talking about austerity failing when spending cuts were mixed with tax increases - Puerto Rico used tax decreases. Different animals.
 
Re: History shows "Balance" of tax increases & spending cuts does NOT work!

Franc, you missed something in the video.

You said, pretty much the same thing that the video says.
 
Re: History shows "Balance" of tax increases & spending cuts does NOT work!

Franc, the article was talking about austerity failing when spending cuts were mixed with tax increases - Puerto Rico used tax decreases. Different animals.

Perhaps my outburst of "BullShit" was misleading. My bad.

I wasn't arguing the point.
I'm just frustrated with the debate.
IT NEVER ENDS
Despite clear pratical evidence.

Lower taxes, shrink government,cut spending= prosperity. A Proven formula since 1789
 
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