Economic Stimulus Math for Economy:
+$100 billion in economic stimulus + (-$100 billion in economic destimulus, higher taxes now or later) = $0 net effect on economy
An article by Artur Laffer on how the rebate is a terrible idea
The proposed rebate of about $600 per man, woman and child is transferred to people based upon some characteristic other than work effort. In fact, if you've worked too hard and earned too much, you won't get a rebate. So in some instances the rebate actually requires the absence of work effort. Now it's true that some of the people receiving the rebate may also be workers, but working is not the reason each person receives the rebate; it's simply because he or she is a human being. Thus rebate recipients are given command over real resources for doing something other than working.
...and finally Greg Mankiw on giving a tax rate to just women. Take a look at the link, it will never pass in Washington but its a great idea and I support any kind of tax cut.
Women have a more elastic labor supply than men. By the Ramsey principle of optimal taxation, familiar to any first year graduate student of public finance, women’s labor income should be taxed less....In modern western societies (and elsewhere) differences in labor supply behavior of men and women are not rooted only in the functioning of markets and firms but originate within the family....family-induced gender difference in access to labor market opportunities is the reason behind the difference in labor supply participation rates and elasticities of men and women.
...and a random picture to lighten up the mood in this post.
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3 comments:
I had an argument about the rebate with my dad....he called me an idiot and called economics "kooky science"....to which I responded...."Well, then your son is a Kooky Science major"
"So in some instances the rebate actually requires the absence of work effort." Mind you that work effort is relative and isn't directly connected to income. Both ways considered there are people who make a lot of money and don't work hard for it and there are people that make no money and they didn't work hard for that either. With increasing changes in wealth the effect of 600 dollars will do little or nothing for them. Don't forget that many times things are done to "help the masses" when in reality it will end up doing little and possibly hurting people in the long run.
Nice rebate
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