Reason #2 to Vote No on Question 1

[asterroc]

What this is all about

Reason #2: Tax cuts may actually increase government spending!

"[T]his paper examines the behavior of government expenditures following legislated tax changes that narrative sources suggest are largely uncorrelated with other factors affecting spending. The results provide no support for the hypothesis that tax cuts restrain government spending; indeed, they suggest that tax cuts may actually increase spending." --Dr. Christina Roma, UC Berkeley Professor of Economics

Thanks to seekingferret for the link. I haven't read through it entirely, but I'm fascinated by the possibility - it seems entirely illogical that tax cuts would NOT reduce government spending. The point here is if people want to reduce government expenditures, cutting taxes may not do the trick.

Comments

[seekingferret.livejournal.com]

One point to consider is that there is a different burden on states to balance the budget as compared to the federal government. I believe a state is probably far more likely to be impelled by a tax cut to cut spending, though I don't have any facts to support this assertion. This is for a variety of reasons, but chiefly because the federal government has a much stronger borrowing facility than states do- the US government can go into seemingly indefinite debt without catastrophic consequence. States doing the same would find their ability to borrow further curtailed by reductions in their bond ratings.

[xoder.livejournal.com]

Correlation v. Causation, anyone?

[seekingferret.livejournal.com]

There may be a distinction between correlation and causation. There's no distinction between uncorrelation and uncausation. If something is uncorrelated, it's also uncausative.

[zandperl.livejournal.com]

She appears to have two possible points: the stronger one of uncorrelation (and therefore uncausation), but she is also (more weakly) implying the possibility of an inverse relationship, which is a correlation.

[zandperl.livejournal.com]

Right, I read the first few pages and the intro talks about how it's important to tease out the reason behind the tax cut, and how that will influence what the gov't is doing with their spending. I don't know if she discusses MA's particular case, so we'll see.

[q10.livejournal.com]

i don't think anybody favors reduced spending as an end in itself. most ‘reduced spending&rsqou; advocates favor it because they see it as necessary for sustainably keeping taxes as low as they are or making them lower. almost nobody thinks ‘i want reduced spending, what shall i do? oh, gee, i guess we'll cut taxes and that'll make it happen.’, although some people probably get confused and say that from time to time.

[zandperl.livejournal.com]

I was under the impression that libertarians would be against the expenditure of money (in addition to being against taxation). Since they want to cut all services other than those they feel the constitutions mandate, I would think they'd want to cut expenditure. Am I mistaken, or misunderstanding your point?

[q10.livejournal.com]

libertarians are usually hostile to government activities for one of two reasons:

1. those activities involve some amount of regulatory or law-enforcement action that they think imposes on somebody's freedom, or involves other undue attempts to influence or control people's free choices.

2. those activities cost money which comes from taxes (which are bad), or require deficit spending which is seen as generally bad for a variety of reasons.

i think that most libertarians wouldn't object to the government putting a chicken in every pot if it could do so with it's magical chicken-making wand, but when the government has to spend itself into debt or raise taxes to do that, it's seen as trouble. when libertarians say ‘if we cut back to only constitutionally mandated government functions...’ that's almost always followed by &lsqou;...then my huge tax cut would become viable’, unless they're talking about specific non-constitutionally-mandated functions that they dislike because they see them as encroaching on people's freedom to do their own thing (like the FDA, the DEA, much of the FCC, et c.)