Let's Look at Those Links

It becomes truly wearisome to hear the Left aver that governmental spending is preferable, as a stimulant, to tax cuts, because governmental spending will "multiply" through society, as same will be spent, whereas a portion of tax cuts will be saved. (Horrors!!) Taking the time to work through the "evidence" offered for this "stimulus" plans, one finds they all harken back to the same source, and that’s based upon ... well, nothing.

A recent post on Bluejersey takes Congressman Garrett to task for his wholly reasonable and thoughtful analysis of the deficiencies inherent in the fraudulently named "stimulus" package of massive spending increases, about to be endorsed by President Obama.

The authors on Bluejersey often link to the sources of their "information", making it relatively easy to spotlight the patent silliness of their assertions. Consider this passage:

"Someone please tell me how a corporate tax cut or credit will actually create more jobs or help people stay in their homes or deal with the rising costs of pretty much everything. How will corporate tax breaks, as Garrett says, "provide an immediate cash infusion to American families"?. Has this happened over the past 8 years, as corporate tax breaks (if not outright rate cuts) have resulted in less (sic) jobs in the US as more are outsourced overseas and have led to more profits in certain sectors, even as prices have increased for consumers? Garrett not only fails to cite any support for his assertions, but studies have shown that this is simply not true - even if one were to look at the impact on Bush?s tax cuts on jobs in New Jersey. In fact, here is a comparison of the impact of various cuts/spending programs on GDP, and here is another chart that shows the impact a bit differently. And, for good measure, here is a post that cites similar results, using data compiled by John McCain's economist - making this even more credible."

Let’s have some fun, shall we?

What "studies" have shown that tax cuts fail to stimulate the economy? Clink the link and arrive at a press release (authoritative, that) posted on a site called Common Dreams, from an entity called One World, and hailing the release of a "study" by another entity called "United for a Fair Economy". As if one could not predict the result from the entity’s name, it describes itself as follows:

"United for a Fair Economy (UFE) is a national, independent, non-partisan organization, founded in 1994 to raises awareness that concentrated wealth and power undermines the economy, corrupts democracy, deepens the racial divide, and tears communities apart. UFE supports and helps build social movements for greater equality."

The press release quotes one Gloribell Mota, who, of course, is an economic expert in her role as a "bilingual education expert." One of the author’s holds the office of "Co-director for Responsible Wealth". In other words, an advocacy group with an axe to grind arrived at precisely the result to which its ideology predisposed it. Do tell.

Quick the next link and you arrive at that bastion of impartial journalism: Mother Jones. (At least it wasn’t The Nation.) But give the devil his due: just because a socialist says something doesn’t make it untrue. Maybe they might actually have evidence to support their ideological predisposition, yes? Well, no.

While first citing to "liberal economists" like Paul Krugman (liberal does not begin to describe him), the article than cites to one Mark Zandi, whose name repeatedly appears in leftist writings. Zandi works at Moody’s and released a study averring that spending produces better stimulus than tax cuts, about which more in due course. Mother Jones further cites to a report from the Congressional Research Service, contending that the report demonstrates that GOP assertions "place ideology over good economics".

But, once again, they make the mistake of actually linking to the report, enabling us to follow up their dishonesty. Consider the following gem:

"Mark Zandi of Moody’s Economy.com has estimated multiplier effects for several different policy options. The multiplier estimates the increase in total spending in the economy that would result from a dollar spent on a given policy option. Zandi does not explain how these multipliers were estimated, other than to say that they were calculated using his firm’s macroeconomic model. Therefore, it is difficult to offer a thorough analysis of the estimates. In general, many of the assumptions that would be needed to calculate these estimates are widely disputed (notably, the difference in marginal propensity to consume among different recipients and the size of multipliers in general), and no macroeconomic model has a highly successful track record predicting economic activity." (Emphasis added).

In short, the report almost universally cited by the left in support of its proposition is nothing more than a Keynesian model, which, of course, reflects the assumptions and prejudices of those who designed them. Garbage in, garbage out.

Click the next link and end up at Jon Shure’s old stomping ground, New Jersey Policy Perspective, another impartial source, which contends that the Bush tax cuts fell short of their job creating targets in NJ. The time period measured was July, 2003, through January, 2005, and the assertion: the Bush tax cuts failed to create as many jobs in NJ as promised.

Hmm. Might something have occurred locally which tended to offset federal tax cuts? Does the name Jim McGreevey strike a responsive chord? McGreevey took office in January, 2002, and went on a massive binge of taxing, borrowing, and spending. Government grew at an astonishing pace. McGreevey publicly threatened businesses who dared voice displeasure at his job killing tax increases. But the blame for NJ’s economic malaise rests ... with George Bush and his tax cuts. That must be it.

The next link is, again, to the Zandi chart which, as above, is demonstrated to be nothing more than a Keynsenian pipe dream. The last links are to Daily Kos and Open Left, the sources for which are, again, Zandi.

The conclusion: liberals favor Big Government. Who could have guessed?

Having demonstrated that Zandi bases his entire analysis upon thin air, we arrive back the beginning, and ask the very simple question posed by Congressman Garrett: what real world evidence exists to support the proposition that massive borrowing and spending will yield positive results? Having reviewed all the authority cited by our friendly Bluey, we find the answer is, yet again: NONE.

If our Blue friends want to see how corporate tax cuts assist the economy, take a gander at Ireland. Ireland’s 12.5% corporate rate (1/3 America’s 35%) produced huge prosperity. (Don’t take my word for it; take Thomas Friedman’s.

Put simply, the left offers models; if their assumptions are wrong (and they always are), the model fails to describe reality. Conservatives offer real world examples of what works (low taxes: Ireland, Hong Kong, Singapore) and what doesn’t (governmental spending: US, 1930's; Japan, 1990s).

Nothing guarantees economic prosperity at all times; no one has yet been able to repeal the business cycle. As the market is composed of people, and people sometimes act irrationally, bubbles will happen and, when the pop, people will suffer. But there is, quite literally, nothing government can do about that, until it finds away to work irrationality out of the human race. Good luck with that.

So, in the face of "crisis", what to do? Even Krugman admits that the present disaster resulted from too much borrowing and spending. Even Krugman admits that the New Deal did NOTHING to end the Great Depression (although, paradoxically, he believes that failure resulted from too little recklessness rather than too much). Already, Obama, Krugman, and the rest of the left are warning: don’t expect results quickly from the so-called stimulus. But if this will not to produce prompt results, why are we doing it at all, as we know for fact it will not produce long-term prosperity?

The answer? Take those actions which history demonstrates produces the greatest prosperity: cut taxes, cuts governmental spending, encourage and reward savings and investment.

No one can predict when the economy will turn around with any degree of certainty, but one thing is essentially certain. When it happens, the "stimulus" bill will have had absolutely nothing to do with it.