Re: TAX CUTS!

[Clifford Poirot <cpoirot@xxxxxxxxxxx>]

Good points Chris. And some of us Keynesians actually think that high levels
of **Structural Deficits** are not good things and that international
monetary flows in the current political economic reality do impose
constraints on the levels of budget decifits that can be accumulated (though
realistically, the US is far from that level).

There is a very good, and necessary alternative to the tax cuts and that is
for the Federal Government to do what the states cannot-deficit spend to
finance the ability of the states to fund essential services.

-----Original Message-----
From: Niggle, Christopher [mailto:Christopher_Niggle@xxxxxxxxxxxx]
Sent: Wednesday, May 07, 2003 12:49 PM
To: 'Forstater, Mathew '; 'Sven R Larson '; 'pkt@xxxxxxxxxxxxxxxx '
Cc: Niggle, Christopher
Subject: Re: TAX CUTS!


Sven. Matt: Wait a minute.  The reason some folks (even "Keynesians") might
be opposed to the particular cuts proposed by the Bushies is because (1)
they are widely skewed in favor of the wealthy, in favor of high income
earners, and in favor of those whose income is from property at the expense
of everybody else.  Thus they would further increase inequality.  (2)
Because they would not stimulate the economy as much as other types of tax
cuts or increased expenditures.  And (3)because their effects on future
revenues would be used as leverage by radical rightists in the congress to
cut necessary public programs (see Bill Greider's piece in the recent
Nation).

Like it or not, Chartalists, most economists and the political class think
that expenditures need to be constrained by tax revenue and if tax revenues
decline that will be used as a reason to cut expenditures in future.  Watch
and see. One may agree with the Chartalist-Lerner position that in the
abstract, taxes aren't necessary to finance national government
expenditures, but in the real world they are necessary (or the expenditures
won't be made).

Consider the dire fiscal situations of most state and local governments and
the resultant cuts in necessary social programs and think what happens in
future if those federal tax cuts are effected; many state tax systems are
linked to the federal income tax system.

Chris

-----Original Message-----
From: Forstater, Mathew
To: Sven R Larson; pkt@xxxxxxxxxxxxxxxx
Sent: 5/7/03 8:15 AM
Subject: Re: TAX CUTS!

Well then you must have missed this then Sven:

http://www.cfeps.org/pubs/sr/sr0301/sr0301.html

see also:

http://www.cfeps.org/pubs/pn/pn0205/pn0205.html

Sven wrote:

>Funny I haven't heard anything positive
from my fellow Post Keynesians about this. When republicans net-cut
taxes,
Post Keynesians yell "supply side economics!", while when democrats
net-cut
taxes they call it "Keynesianism". Truth is, tax cuts, like money, don't

smell.

/srl

--
Dr. Sven R Larson