Do Tax Cuts Cause Deficit?

If you have watched Fox News you are probably familiar with their "fair and balanced" panel discussions. They usually have two conservative commentators and two liberal commentators to discuss issues of the day.

One of their more interesting discussions was about cutting taxes versus cutting the deficit.

The commentators who favored tax cuts argued that tax increases would hurt small business owners who are the source of about 85% of the new jobs that are created. Therefore, tax increases would extend the current recession.

The commentators who favored deficit reduction argued that it was inconsistent for fiscal conservatives to support both deficit reduction and tax cuts at the same time. Their obvious assumption was that tax cuts reduce the amount of taxes the government collects and must therefore result in higher deficits.

Neither group discussed the issue of spending in relation to deficits.

But the tax cut advocates did argue that tax cuts increase total economic output and therefore result in higher tax collections. They also pointed out that past tax cuts have reduced the annual deficit and in some cases have helped to generate surpluses.

The liberals who argued in favor of tax increases to reduce the deficit apparently operate on the assumption that the economy is static and that tax policy does not alter economic activity. They seem to be unable to accept the idea that lower taxes results in more jobs and prosperity which in turn result in more tax revenue that can be used to reduce the deficits. Nor did they seem to be concerned about the impact of government spending on the deficits.

Vern

Are You a Conservative or a Liberal?

I received the following comparison of a conservative and a liberal via mail from an unknown source. However, the lack of a specific source doesn't detract from the message. (Vern)

Listed below are very obvious issues that have sprung up in the past two decades. It is an attack on life in America .

If you ever wondered what side of the fence you sit on, this is a great test!

If a conservative doesn't like guns, he doesn`t buy one. If a liberal doesn't like guns, he wants all guns outlawed.

If a conservative is a vegetarian , he doesn't eat meat. If a liberal is a vegetarian, he wants all meat products banned for everyone.

If a conservative is homosexual, he quietly leads his life. If a liberal is homosexual, he demands legislated respect.

If a conservative is down-and-out, he thinks about how to better his situation. A liberal wonders who is going to take care of him.

If a conservative doesn't like a talk show host , he switches channels. Liberals demand that those they don't like be shut down.

If a conservative is a non-believer, he doesn't go to church. A liberal non-believer wants any mention of God and religion silenced. (Unless it's a foreign religion, of course!)

If a conservative decides he needs health care, he goes about shopping for it, or may choose a job that provides it. A liberal demands that the rest of us pay for his.

If a conservative reads this, he'll forward it so his friends can have a good laugh. A liberal will delete it because he's "offended".