My newest Fox News piece starts this way
Neither government spending nor tax cuts automatically provide an economic stimulus. But President Obama has continued to make this mistake. Take a look at much of what he insisted be included in his tax cut deal with congressional Republicans.
So what makes the economic pie bigger? There are two sides to this. The supply side: lower marginal tax rates mean the more that people get to keep from each additional dollar that they earn, the harder that they will work and the more that they will produce.
The other view, the Keynesian view, also often called "the demand side view" or "the multiplier," is that giving the money to the right people to spend which will create wealth. Democratic House Speaker Nancy Pelosi made this claim earlier this year when she advocated more unemployment insurance benefits: "it injects demand into the economy and is job creating. It creates jobs faster than almost any other initiative you can name. Because again it is money that is needed for families to survive and it is spent."
We see this line of reasoning in the proposed 13-month extension of unemployment insurance benefits to continue paying out benefits for up to 99 weeks.
It is also the basis for the president's proposed expansion of the earn income tax credit and items such as the college-tuition tax credit for relatively lower-income families. . . .
Labels: Economics, Economy, foxnews, op-ed, unemployment