Sunday, October 28, 2012

Reason 3--Fun With Numbers
Another reason I intend to vote a certain way is that the person I will not vote for plays games with numbers.  He says the President is a failure because the unemployment rate is stubbornly high.  The unspoken truth of the unemployment numbers is that fiscal austerity has cost hundreds of thousands of public sector jobs even while private sector job growth has been steady, and that is why the rate has remained high. This austerity has been imposed by the red team, and they should not blame the President for it. If the Ryan-Romney budget is implemented, millions of public sector jobs will be lost, and we will have to trust to voodoo economics to create private sector jobs to replace them.

I don't believe lower taxes on the rich and elimination of the regulation that is intended to curb the excesses of the private sector will open a floodgate of new jobs.  There is no evidence that supply-side economics has worked in the past, what ever the wishful thinkers say.  What supply-side economics has done is make wealthy people like Romney and Ryan, wealthier.

As an aside, an economist named Laffer (how apt) once claimed that the willingness of people to undertake economic activity falls rapidly as the marginal tax rate (the rate on the incremental dollar of income) increases.  The Laffer Curve is, like so much of the dismal science, false.  Do you really think someone will refuse to earn a second million dollars of income because they will pay an extra nickel of each of those dollars to income taxes?  I don't.  The rich never seem to hesitate to get richer, which is fine by me. Just don't try to rig the world in your favor and don't cry if you are asked to part with a little more of the second million than you did of the first.  A tax rate of 40% is no higher than what Reagan imposed on high incomes in the 80s.  If the sainted Ronnie could do it then, why is it such a horrible idea now?

You can find some economist somewhere to agree with just about any proposition, and can therefore find "proof" for almost any policy choice from the output of economists.  But such fun with numbers proves nothing.  

I'm not willing to trust voodoo economics to create jobs.  Job growth will continue as conditions improve.  All those fired state and local workers have to work their way through the system and find jobs.  Firing a lot more government workers will not reduce the unemployment rate, whatever creative math the red bunch comes up with.    

1 comment:

  1. Mr Romney's funny numbers approach applies to his "analysis" of GM and Chrysler production plans in China -- as if local production in China for sales in China -- the fastest growing car market in the world -- somehow suggests outsourcing of US jobs. Oh truth, where art thou?

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