Econ Militia: Does cutting taxes spur growth or cause harm?

The two dominant political parties in the United States embrace different economic ideas. Democrat Barack Obama claims the government has to spend our way out of the recession. Republican John Boehner claims cutting taxes will cure the recession. Both say the other is wrong.

So who's right?

In just five and a half minutes, the citizen economists review both ideas, draw on learning from some of our earlier episodes and provide an answer.

We identify a problem with politicians: the desire to spend our way out of the recession AND cut taxes, which means both parties like to use both economics ideas. Since they're mutually exclusive ideas, that's like having your cake and eating it, too.

The populist tone from President Obama -- that he can cut your taxes, raise taxes on "the rich" and blanket us all with services is hardly unique, though his aggressive pursuit of those policies is deeply damaging to the economy. We've seen Keynesian ideas put in place a half century ago, saw their awful results and abandoned them nearly 25 year ago. So why try them again?

What's next, bell bottom pants and a remake of Serpico?

Tell truth to power. Hear the real story. Think for yourself. Join the conversation at econmilitia.com.

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[MrLardog2003]

No they can not spend us out of it. I wish they would quit.

[EconMilitia]

In fairness, Reagan spent government dollars well -- the defense spending he promoted helped to build a strong tech sector, a strong national defense, and a potent set of products companies could resell around the world.

But spending in this administration is quite a bit less effective, and little if any benefit.

[tstfortruth]

We cannot spend our way out of recession, when that spending = deficit spending. I completely agree. Tax cuts have always stimulated business growth as the wealthy start to loosen up some of their funds and invest them into creating more opportunities to grow their wealth, thereby creating jobs and stimulating the entire system.

[scottvska]

Why do you expose so much cleavage, ma'am? Do you want to be listened to or ogled?