from Scott Grannis at Calafia Beach Pundit, Taxes Don’t Lie


As a supply sider, I don’t see the logic behind the theory that more government spending is stimulative and less is restrictive. How can taking money from those who are working and giving it to those who aren’t create a bigger economic pie? It creates perverse incentives, for one thing. And it also channels the economy’s scarce resources into the less-productive sectors of the economy. True economic growth only comes about when scarce resources are utilized in a more productive manner. I think the massive amounts of deficit-funded spending we’ve seen since 2008 are one of the main reasons the economy has been so weak. Bigger government is not better. With spending now having shrunk to historic norms relative to GDP, I’m tempted to say that growth has a chance of picking up.


We can increase spending with a tax cut and it would still be considered Keynesian. Kennedy did just that.  The big difference is who gets to decide how the money is spent and thus what it gets spent on.  It does make a difference how the money is spent. But it also makes a difference where the money comes from.  Higher productivity is more sustainable than either debt or inflation.