I’ll bet you thought I was talking about saving money on your tax bill.
No, I was just taking a break from estimating my own taxes by reading Mike Kimel’s brilliant yet simple exposition of the failure of “supply side” tax theory, supported, amazingly enough, by an economist at the American Enterprise Institute.
As Mike points out, there are other, more ethically challenged economists at that tax-subsidized slush fund for the occasionally unemployed policy advisors to the GOP (I’m talking to you, Hassett and Hubbard). Those others don’t let troublesome facts get in the way of their opinion-slinging.
The article also had a couple of excellent summaries of Keynesian macro theory, which has, these past thirty years, been given the Elders of Zion treatment by our partisan right-leaning thought leaders.
My favorite short form summary of Keyne’s General Theory follows the break.
From Mike’s post in the wee hours this morning on The Angry Bear (I’m guessing Mike is spending his time in 1040 land today, as well):
I would assume that it isn’t controversy to say that Keynes General Theory, which is the basis for everything one can call “Keynesianism” can be summarized as follows: “When the economy slows, people buy less stuff, so manufacturers hire fewer people, pushing up unemployment and decreasing wages. This in turn slows the economy even more, leading to even more even pressure on employment and wages. But if the government were to start buying stuff, counteracting the reduction in demand from the private sector, it will decrease the pain companies feel, and thus decrease the layoffs and the downward pressure on wages, preventing the economy from getting worse and ending the recession sooner.”
It would be really nice if we had a fact-based discussion of economic policy this year, since that is likely to be the crux of the coming political season.
I doubt it will happen, when it’s so much easier and comfortable to perpetrate self-serving lies. And yes, now I’m talking to you, Ryan and Romney.