Auspicious Beginnings
Welcome to the discussion site for Claremont McKenna College PPE Class of '06, the reluctantly dubbed "One and Only Arrogant Class."
In the names of Edward J., Bjork, Roth, Elliott, and Blomberg!
posted by SlickRicks @ 10:24 AM
1 comments
1 Comments:
I'm pretty sure Katy's right about why the multiplier is bigger for government spending than a tax cut, but there are also legitimate economic questions about what happens to overall government spending when either tax cuts or new government programs are created. Representative democracy seems to cause some inertia in making adjustments to pre-existing government programs; hypothetically, a tax cut requires some offseting decrease in spending, and vice versa. However, both of these supposedly complementary fiscal measures rarely happen together because politicians have no short run interest in fiscal responsibility when the alternative is popularity for the marginal benefits voters perceive. Politicians, being single-minded reelection seekers, benefit more from advertising their support of a tax cut or a new government program, but usually would not benefit from opposing either.
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