Tax cut incoherence

I don’t get why I haven’t seen anybody make this point before, but count on Chait.  Basically, to argue that you cannot raise taxes in a recession is an implicit acceptance of Keynesian economics.  Of course, Keynesian economics also says you should spend to get out of the recession, but Republicans won’t go for that:

Basically, if you believe that recessions are bad times to raise taxes, then you should also believe they’re a bad time to cut spending. Alternatively, if you reject the Keynesian model, then you might think raising taxes is bad, but there’s no particular reason to think raising taxes during a recession is especially problematic.

The conservative rhetoric about raising taxing during a recession amounts to an ideologically incoherent pastiche of mutually exclusive theories. It literally makes no sense at all.

Time and time again, the evidence shows that Republicans’ primary ideological driver is less taxes for rich people.  Full stop.  That’s it.  Everything else is just window dressing on this politically unpalatable idea.


About Steve Greene
Professor of Political Science at NC State

One Response to Tax cut incoherence

  1. jonolan says:

    The only incoherence in evidence is Chait’s spin on the issue.

    Raising taxes on the producers during a recession is foolish, even more so in a fear and rumor driven economy such as our markets are. That’s hardly Keynesian but quite factual.

    Increasing government spending during a recession just increases the deficit, which leads to inflation and currency devaluation. Again, that’s hardly Keynesian but quite factual.

    I will say this for the Keynesian model – when the lower and middle classes have more wealth they spend more and bolster the economy. That much of it is true.

    They’re not the ones creating jobs though, so government efforts to stimulate their spending by handing them money is stupid. You’d think even Liberal economists would have learned that mistake from the effects of adding Montezuma’s gold to Spain economy.

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