Friday, August 6, 2010

Paul Krugman An Economist?

Paul Krugman claims to be an economists, in reality Krugman knows nothing about economics not even economics 101. In Today's Keynesian screed Krugman seems to be saying that all tax cuts reduce revenue.

But the budget office has done no such thing. At Mr. Ryan’s request, it produced an estimate of the budget effects of his proposed spending cuts — period. It didn’t address the revenue losses from his tax cuts.

However, any economist will be able to explain how tax increases reduce the amount of revenue taken in by the government over time while lowering taxes will increase revenue taken in over time. The reason is really basic in the principles of economics. All one has to do is read any economics book about how businesses set the prices of their goods. Set the price to high and sales will decrease and the company loses revenue. The same is true of taxes. When the rates of taxes are too high revenue decreases. We can see this with our government.

Take California for example. California boasts some of the highest taxes in the land and yet they are on the verge of bankruptcy. The same can be said of New York and New Jersey. Does anyone see the trend? The states with the highest rates of taxation are also the sates with the largest budget deficits. In 2007, our country took in more revenue than ever before. Our deficits as a nation were on the decline yet Krugman along with the lunatic left push the meme that higher taxes will solve what ails America. Nothing could be further from the truth.

Obama and the left have pushed their Keynesian policies for the last 4 years. In the last 18 Months Obama took a almost $500 billion deficit and turned it in to $1.5 trillion dollar deficits. The problem is not that we tax to little. Our government spends to much. For example why in the world would the government spend stimulus dollars on a study of the effects of cocaine on monkeys? How many jobs did that save or create? Today's unemployment numbers show not only a decline in jobs, but also a steady stream of prospective job seekers leaving the workforce. The 9.5% unemployment rate may have been static this month but only because the job losses last month, under the Obama and Krugman economic strategies, was outnumbered by the hard working Americans leaving the workforce.

Mr. Krugman has written in the past that deficits are good. Government spending raises output. The basic premise may or may not be true. What is true is that perpetual debt increases are bad for the economy. Running annual deficits at 10% of GDP is unsustainable. We need to get our fiscal house in order and raising taxes on "The rich" is not going to create or save any jobs. There is a reason businesses are sitting on $1.8 trillion dollars. The reason is uncertainty and taxes. When the government increases taxes on the job producers what we get is less jobs, higher unemployment, lower tax revenues, and a shrinking economy. Mr. Krugman you are no economist. Mr. Krugman, you are an idiot that wouldn't know a Keynesian crisis if it hit you in the nose.

1 comment:

Anonymous said...

Krugman isn't an economist, he's a political hack! His position changes when covenient as often as some rabble-rouser from the HuffPost.