Thursday, December 17, 2009

State Spending vs. Tax Cuts

What type of budget deficit is the most efficient? Beyond the investment-consumption debate the state spending increase versus tax cuts debate is no less important. Greg Mankiw here favors tax cuts and argues that they have a more positive impact on activity than government spending. Nate Silver here shows that the Obama policy does include substantial tax cuts.

This was after all a policy that an American “liberal” such as John Kennedy adopted, following the advice of Paul Samuelson.

It is a policy that should claim the higher priority to boost the over-taxed European economies.

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