[personal profile] 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 [livejournal.com profile] 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.

Date: 2008-10-03 08:56 pm (UTC)
From: [identity profile] 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.

Date: 2008-10-03 10:17 pm (UTC)
From: [identity profile] 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.

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