SamuelRSmith said:
Mr Khan said:
SamuelRSmith said:
| Flanneryaug said:
Tax cuts and spending are basically the same thing. Both raise the defecit. Also, you need to spend to get out of a recession, and then you cut once the economy is better.
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No, you don't. Read up on the recession of 1921. The initial decrease was much larger than that of 1929's. The Government cut spending and taxes, and the economy was growing again by 1922. Look at every recession since, where the response has been more spending... and look at how long they last.
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But we forget that Hoover attempted a response similar to Harding's, and things dragged through to 1932, bottoming out only until FDR was elected.
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http://mises.org/daily/4197
http://mises.org/daily/4350
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Nope, hadn't been aware of that, I guess it's another historical myth. I do remember that part of the issue was the adherence to the gold standard from my Monetary Economics class, part of the issue that messed up Europe after the first world war by attempting to restore pre-war prices.
Of course, the issue with Keynesianism is that its tied to democracy, and improperly applied. Higher tax rates should be applied during the boom times to help slow the inevitable economic overheating (accumulating a surplus), set against tax cuts and stimulus spending during the
