Last edited by Thunder; 11-22-11 at 07:04 PM.
Now I am not very familiar with the situation in America, but my naive opinion is that cutting taxes and giving handouts (subsidies of any kind, social systems, etc) are just two sides of the same medal: Populist actions by politicians who want to buy votes, which are irresponsible when the budget situation is stressed and when this policy results in more debts.
We see it in Europe: Certain governments used to buy votes prior to elections, by spreading money, extensive social welfare and handouts, subsidies, taxcuts -- and suddenly, the debt was too high to be paid back. Too bad.
Bush jr. did the same with his tax cuts. Buying off voters against good economic interest. On top of burning more than a trillion in Afghan and Iraqi sand, that meant playing away the good budget situation Clinton had left him. And I am sure Obama did it too, to some extent (although I am really not enough into the details of, say, healthcare reform to name it).
But for some reason, many Democrats seem to believe tax cuts are worse than unnecessary spending, and many Republicans somehow don't like spending, but are fine with tax cuts -- although both are different means to the same end in the political game, the two sides of the same medal of buying votes.
"Not learning from mistakes is worse than committing mistakes. When you don't allow yourself to make mistakes, it is hard to be tolerant of others and it does not allow even God to be merciful."
the laffer curve - while unspecific - tells us that excessive taxation causes investors to throttle back on their investments because the projected reward no longer exceeds the aggregate of risk and tax burden
to exemplify my point with an admittedly extreme example, if the tax rate were 99%, you can see there is no longer an incentive to expand one's business exposure
while that did not come into play for the clinton of shrub administrations, there is some indefinite point at which tax increases are no longer beneficial for growing federal tax revenues
The bottom line, is that the Libbos have been claiming that tax cuts don't work, the facts tell a much different story.