Wednesday, November 11, 2015
ECONOMIC QUESTIONS THAT OUGHT TO BE COMPLETELY OBVIOUS:
Q Does cutting taxes create more demand?
A Only where it creates more discretionary spending.
Q Where would it not create more discretionary spending?
A. When taxes are cut on those who have infinite discretionary spending.
A. Because there is no such number as Infinity plus one.
Q. Does Cutting Income Tax spur growth?
A. Only in so far as other types of taxes are not raised.
Q. Like what other types of taxes are there?
A. Policy Taxes: Negative real rates, for example, are massive taxes on the household and savings sectors and a massive subsidy for the banking and corporate sectors. As are Tarrifs. As are polices that incentivize stock buy backs at the expense of worker compensation. All these taxes crush demand. This is why cutting only income taxes will have very little effect on demand.
Q Will Repealing and Replacing Obamacare save money and spur the economy?
A. Definitely not in the short and intermediate term. Possibly the the very long term if it is replaced with a very efficient system.
Q Why not in the short term?
A. Because it is Very Expensive to create the bureaucracy necessary to repeal and replace a policy that has created enormous systemic apparatus that must be dismantled.'
Q. Will deporting 11 million illegal aliens spur the economy?
A. Obviously not.
Q. Why not?
A. Because it would be extraordinarily expensive to create the Massive Bureaucracy necessary to perform such a Herculean task.