Just a Reminder About Stimulating the Economy

I wrote this a while back, but given the Romney platform of all tax cuts and no spending increases, here's what Moody's Analytics has to say about which option is a better return on investment.

FACT: Every dollar spent on the Bush tax cuts only creates $.32 in economic growth — that’s a 68 cent loss on investment. Every dollar spent on making capital gains tax cuts permanent will only result in $.37 in economic growth -- a 63 cent loss on every dollar spent.

The old chart from Moody's:

In other words, both tax cuts and government spending are deficit hogs. But only one of them actually stimulates economic growth and job creation. And it's not tax cuts.

  • muselet

    All true and all familiar to anyone who’s heard of John Maynard Keynes.

    But … (You knew one was coming, didn’t you?)

    Romney and the Rs clearly don’t care about economic growth. Or what sane economists have to say. Or the catastrophic consequences of slashing both taxes and social services. What they seem to care about is reestablishing feudalism as quickly as possible.

    Therefore, all the facts and figures Moody’s Analytics and Paul Krugman and the rest can muster are irrelevant.


    • muselet

      ADDING: I miss sane Republicans.