Are Liberals Being Unfair to Paul Ryan? – An Economics Lesson For Left And Right

The article Are Liberals Being Unfair to Paul Ryan? is really kind of blah.

I get nervous when I start feeling too certain about something, and I feel pretty certain that Paul Ryan’s budget is a massive devolution of government responsibility masquerading as fiscal prudence. So I called Alan Viard, a tax and entitlement scholar with the American Enterprise Institute, to ask what was fair and not fair to criticize in the Ryan Roadmap. It was a wide-ranging conversation, but here’s an edited selection:

One response by Alan Viard does create a teachable moment.

But one response to [your claim] is that a strategy that focuses on cutting spending should give you better long-term growth than one that relies on tax increases.

In general and under normal circumstances, tax increases are not good for growth.  However, we are not talking in general and we are not in normal circumstances.  When the wealthy are withholding money that would help stimulate the economy and they are unfairly increasing their share of wealth, then tax increases on the wealthy would spur growth in the short term better than spending cuts would.

When the economy is roaring and inflation is rampant, then spending cuts would be good.  When private demand is insufficient to support full employment, our infrastructure is sorely in need of investment, and construction costs are low, then spending cuts are extremely bad.

No single policy with regard to the economy is always right at all times in all circumstances.  Idealogues of both right and left need to learn this lesson.  Reporters need to be smart enough to ask the right questions.

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