Economics and Politics

Tyler Cowan wonders if the FASAB’s recommendation should be accepted, and future Liabilities from Entitlement programs be listed in the current fiscal Budgets. The Pro-argument states the Legislative process might get more fiscally responsible while under pressure from Public exposure of longterm Costs of their activity. The Con-argument states neither Party could possibly want it, as Politicians would lose Popular Support, support from Special Interests, and an immense lot of Campaign contributions. I favor Exposure, and might even get George W. Bush’s support, if the Exposure started the Year after he left Office.

David Altig presents a good Post which he titles ‘Laffer’s Defense’. It is good analysis of tax revenue generation under varied series of Tax impact. I seriously don’t see it as a likely defense of Laffer. Here is the Problem: All Specialty forms of taxation incur drain of Income reportage and expenditures to alternate forms where tax impact is avoided. There has to be a universality of Taxation, where Income shifts do not affect Tax impact. I have always claimed that a Flat tax is viable, if and only if, it taxes all forms of Income irrespective of generation. A lot of Economists would disagree, saying some forms of Income should get preferential treatment for economic growth. I always respond that the best Incentive for economic growth stands as a low, universal Income tax which must be treated as a Production Cost.

Eduardo Porter still does not get it: It is the Economy! Voters are unlike Economists and Politicians, and view the Economy only from the impact on their Households. Bush promised great economic gains with his Tax Cuts, which Republicans proclaim, but Economists remained divided. Voters see advancing Product pricing (except for Oil, which Oil Producers, Oil companies, and Speculators attempt to reverse, and Consumers have expectation that they will) coupled with relative stagnant Wages and Salaries for themselves. They look back at the late 1990s, and ask ‘How the hell did the Republicans get Us here?’ lgl