I have been engaged in a spirited debate with Kay from BlueRacine.blogspot.com. In a recent post she equated the notion of tax cuts with "snake oil" while I maintain that tax cuts contibute to economic development which can ultimately result in more revenue for governments.
So I shared with her the delightful news that our federal deficit has been reduced by $165 billion over the last two years. Don't bother looking for that info in the JT, I found it in the Wall street Journal. Anyway, I believe that deficits can only be reduced by lower spending or higher tax reciepts or a combination of the two. Now we know that Republicans have been spending like drunken sailors, we have two ongoing wars, and we have had a huge disaster in New Orleans, so we know that the deficit reduction is not the result of spending restraint. The reason is more tax reciepts. Now we also know that Bush is widely criticized for lowering taxes. So how is it possible that after lowering tax rates, we are collecting more in taxes? The reason is that lower taxes stimulate economic growth. Economic growth is taxed, so we are collecting more in taxes despite a tax cut. To a liberal not used to thinking, this sounds like snake oil. I say bring on the snake oil.