Categories
Economy

Tax Cuts Didn’t Work Last Time

Here we go again. The architect of the Recovery that was not a recovery is again advocating the exact same prescriptions as though something magical will happen this time:

Summers calls for new boost to economy | Reuters.

Our Stimulus Package that was originally slated to be $800bn in spending ended up being about $400bn in tax cuts and look where it got us. And the reason is simple: the amount of money the government gives up in revenue only amounts to a scant few dollars in the pockets of most Americans.

Oh, sure, “every little bit helps.” But if you’re wanting to stimulate the economy, an extra twenty bucks every two weeks is not going to compel the average worker to go buy a new TV. If anything, it will encourage saving, which while a good instinct, does nothing to stimulate the economy.

Summers’ suggestion of infrastructure spending seems like welcome news, until you remember that most of the Stimulus money still isn’t spent and what was spend didn’t happen nearly quickly enough. Maybe we aught to start spending on that job training we keep hearing so much about?