Sunday, September 24, 2006

Another Example of What's Wrong With Supply-Siders

A TCS daily article thinking that concern over a budget deficit that have reached 10% of GDP is "deficit fetish". 10% of GDP is the equivalent of America having an annual $1.3 trillion deficit.

While I agree that raising taxes is not a good solution, not recognicing that a deficit of that size is a big problem indicates severe defiencies in your economic understanding.

His later suggestion that it is possible to get out of a 10% of GDP budget deficit merely by growth is also extremely out of touch with reality. Euro or not-Hungary needs to significantly reduce government spending.

The supply-side love of deficits is, together with their love of inflation the biggest problem with supply-side economics.


Post a Comment

<< Home