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Krugman blog: The Ultimate Zombie Idea (November 3, 2012)
The controversy over the withdrawal by the Congressional Research Service of a report showing no connection between tax cuts for the rich and economic growth is a reminder that in U.S. politics, at least, the tax cuts/growth notion is the ultimate zombie idea.

I mean, when the CRS report first came out I didn't write about it because it was basically old news (which is not to criticize the report, which did a fine job of putting the evidence together). Nobody has ever been able to find clear evidence of a link between high-end tax cuts and growth. The raw fact, after all, is that the US economy did better in the first half of the post World War II era, with high top marginal rates, than it did in the second half: growth was both somewhat slower and much more unequal in the years after Reagan's 1981 cut than before.

...

There is, of course, no mystery here: just ask who benefits from the dogma that ever-lower taxes on the wealthy are just what we need, and you understand why there is always plenty of money for both economists and politicians who promote the dogma.



I distribute. You re-distribute. He gives your hard-earned money to lazy scroungers. -- JakeS
by Migeru (migeru at eurotrib dot com) on Sun Nov 4th, 2012 at 05:33:14 AM EST
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