Saturday, December 23, 2017

Central Planning

Wall Street Journal Weekend interview with Pennsylvania Senator Pat Toomey, "the Senate's leading intellectual force for growth economics" --

There will be “estimates all across the board,” he continues [for growth effect of tax cuts]. “Joint Tax will have theirs, and private economists will have theirs. But just ask yourself at a gut level: Do you think it’s plausible that we can go from the 1.9% [growth] that CBO currently projects, to 2.3% average growth over the next 10 years, if we do a great job with the tax-reform bill?”

The fact that Toomey holds, and sold the tax cut to his colleagues on the basis of, a high confidence that this particular tax legislation will increase growth by 0.4 percentage points annually -- with all the other things that could happen and the huge prospect for changes in tax behaviour -- is a perfect illustration of the economic philosophy of the Republican party. Pull some levers, and 0.4 percent more widgets come off the assembly line!

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