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.