Nobody could ask for a starker demonstration of the superiority of government spending over tax cuts as a means of stimulating a weak economy or achieving fiscal balance than the Congressional Budget Office's breakdown of the economic impact of various aspects of 'plunging' over the 'fiscal cliff.' It's particularly impressive because that is not the avowed purpose of the exercise, which is to assess the loss of economic growth attributable to various reductions in spending and increases in taxes.
Bottom line, removing a dollar of government spending is far more injurious to the level of economic activity than adding a dollar of taxation. And, adding a dollar to the tax burden of the 99% is more injurious than adding the same dollar to the tax burden of the 1%. Anyone with an open mind would conclude that a serious exercise in fiscal responsibility without derailing the private sector would emphasize increases in tax revenues and not cuts in government spending. But there aren't many open minds out there.
Mind you, all this is on the margin, where direction doesn't make much difference. But that's where we live. No extrapolated straw men, please.
How much longer will the braying advocates of economic stimulus through tax cuts and fiscal responsibility through cuts in government spending be given column inches, bandwidth or airtime to tell their lies? They are today's answer to the flat earth society. They may be free to believe the earth is flat, just like Donald Trump, the first citizen of Richistan, is free to question the president's Hawaiian birth. But they shouldn't be given any more respect than the science know nothings or grownup boys born on third who think they've hit a triple.
Wednesday: FOMC Announcement, CPI
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