Tuesday, November 23, 2010

Higher Taxes and More Spending

Stephen Moore and Richard Vedder in The Wall Street Journal: Higher Taxes Won't Reduce the Deficit:
Using standard statistical analyses that introduce variables to control for business-cycle fluctuations, wars and inflation, we found that over the entire post World War II era through 2009 each dollar of new tax revenue was associated with $1.17 of new spending. Politicians spend the money as fast as it comes in—and a little bit more.
 Nothing short of a balanced budget amendment will fix this problem.

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